The closing process is necessary in order to

Business

1 answer:

goldfiish [28.3K]2 years ago

5 0

Answer:

The closing process is necessary in order to confirm that net income or net loss and owner withdrawals for the period are closed into the owner's capital account.

Explanation:

Most economies around the world follow a specific accounting period which is commonly referred to as financial year or tax year. Before a new financial year begins, the accounts from the ongoing financial year have to be closed legitimately through a process called the 'closing process'. This process culminates in confirming that the net income secured or the net loss bore by the owner is included in no other account than the owner's capital account.

In order to carry out the closing process, the accountant has to commence with identifying the accounts that are required to be closed with or before the ending of the predefined financial period. He then has to record the last entries in these accounts as 'closing entries'. Once the accounts are closed, he has to calculate the trial balance and interpret the outcome. Closing of temporary accounts through a valid closing process dispenses the ease of calculating profit and loss in any given financial period coming to end.

You might be interested in

Which of the following is an element of economic forces? a) New production forces b) Health, food, stress c) Competitors and sup

Ksju [112]

Competitors and supply chain is an element of economic forces.

<h3>What are economic forces?</h3>

Economic forces are those factors that assist a firm in terms of its competitiveness in the environment it operates.

Here, economic forces have a direct impact on business and are essential factors that can help an organization in accomplishing its targets.

Learn more about economic forces here: brainly.com/question/13721949

#SPJ1

4 0

1 year ago

A single man lived in his residence for 3 years, sold it for a gain of 185000 he is 58 years old when preparing his tax return h

svlad2 [7]

File form 6239 for a reduced rate.

8 0

2 years ago

_____ are the taken-for-granted beliefs and philosophies that are so ingrained that employees simply act on them rather than que

Serggg [28]

Answer:

5. Basic underlying assumptions

Explanation:

Basic underlying assumptions represent the core and essence of culture which are too difficult to observe because they exist in unconscious levels and least observable part of a culture. They can be taken lightly but they have a great influence and form the key to understanding why things are they way they are.

8 0

2 years ago

Even though it was extra work for the company to implement, Johan was happy that consumers had asked for a better grade of plast

aliya0001 [1]

It should be noted that the competitive advantage of Johan's company is being affected by Demand conditions.

<h3>What are Demand conditions?</h3>

Demand conditions can be regarded as the size and nature of the customer base for products, and this usually bring about innovation and product improvement.

This is why Johan was happy that consumers had asked for a better grade of plastic for the toys his company produced.

Learn more about Demand conditions at:

brainly.com/question/4804206

7 0

2 years ago

What do you think about the 7dream concept for seven- eleven japan? from a supply chain perspective, is it likely to be more suc

VashaNatasha [74]

The Seven Dream concept of the Seven Eleven convenience store is a good supply chain concept that targets e-commerce customer. While most of the e-commerce portal are successful these days, 7 Dream comes as an unique inception. This allows customer to order via online and collect from the store deliveries at their convenience as well. The concept is seem to be more preferred in Japan, where customers have preference towards store delivery of the shipped goods. In fact, the 7- eleven in Japan is more successful than any other countries where the franchise has its stores open.

From the supply chain perspective, I think 7dream concept will be more successful in Japan than in USA. The reason being the urban customer of Japanese market and convenient access for them to store and pick up. For place like USA, where population is sparsely distributed to large area, this supply chain concept will not be very effective. For Suburban population, this model will be very inconvenience as they have to drive a long way to store to collect their deliveries, which they could have easily got home delivered via other such services.

6 0

3 years ago