Question

1. What types of accounts should be closed at the end of the period? What are the closing processes?

2. Based on the following trial balance for XYZ company, prepare the income statement

XYZ Partial Trial Balance December 31
Dividends	36,000
Revenue earned		72,000
Supplies expense	3,425
Rent expense	6,000
Wages expense	22,000

*Answer these Questions

* No hand Writing or Pics

Answer 1

1)	Accounts which are temporary in nature shall be closed at the end of the period.
	Closing Process:
	a)	Revenue accounts are closed by passing entry
		Revenue Accounts
		To Income Summary
	b)	Expense accounts are closed by passing entry
		Income Summary
		To Expenses
	c)	Net Income / (Loss) get transferred to Retained Earnings, entry
		Income Summary
		To Retained Earnings
		(To transfer profit)
		Retained Earnings
		To Income Summary
		(To transfer loss)
	d)	Dividend expense (if any) is closed by passing entry
		Retained Earnings
		To Dividend

2)	Income Statement
	Revenue Earned				$ 72,000.00
Less:	Expenses
	Supplies Expense			$   3,425.00
	Rent Expense			$   6,000.00
	Wages Expense			$ 22,000.00
	Total Expense				$ 31,425.00
	Net Income				$ 40,575.00