When we are closing our accounts, we need to make the account's balance zero. Owner's Drawings has a debit balance, so we need to credit the account to "close" it, or make the balance zero. It's the same concept as to why we're debiting revenues and crediting expenses in the first two closing entries. Hope this helps!
Hi what happens if there's accumulated depreciation in post-closing? Will it still be credit side or will it be a negative value on the debit side? The problem with putting it on credit side is that the total sum value of the post closing trial balance doesn't match with the total sum value of the balance sheet... any idea on this? thank you so much!
Accumulated Depreciation would still be a credit balance on the post-closing trial balance. The totals from the post-closing trial balance do not need to be the same values as the totals from the balance sheet. As long as the debit and credit columns equal on the post-closing trial balance, and Assets = Liabilities + Owner's Equity on the balance sheet, then everything is fine.
Thank you so much this is what I couldn’t figure out! Now it’s balancing!
wow. You made me understand it so well after struggling to absorb the idea.THANK YOU
Glad this helped!
I appreciate your work.thank you،🇸🇩🙂
Quick question when doing closing entries do we include prepayment and accruals if any ???If not why do we leave them out ???
question, please help, why the owner's drawing is placed in credit acc? but in the trial balance it is debited
When we are closing our accounts, we need to make the account's balance zero. Owner's Drawings has a debit balance, so we need to credit the account to "close" it, or make the balance zero. It's the same concept as to why we're debiting revenues and crediting expenses in the first two closing entries. Hope this helps!
Hi what happens if there's accumulated depreciation in post-closing? Will it still be credit side or will it be a negative value on the debit side? The problem with putting it on credit side is that the total sum value of the post closing trial balance doesn't match with the total sum value of the balance sheet... any idea on this? thank you so much!
Accumulated Depreciation would still be a credit balance on the post-closing trial balance. The totals from the post-closing trial balance do not need to be the same values as the totals from the balance sheet. As long as the debit and credit columns equal on the post-closing trial balance, and Assets = Liabilities + Owner's Equity on the balance sheet, then everything is fine.
@@stevenforce3344 i see, thank you! its also nice that you're still active on youtube helping people out
Thank youuuuu!!
Perfect!!
Tnx man helps a lot
THANK U SO MUCH
Where did u get the 35,000?
35,000 was the beginning balance in Owner's Capital that was given to us in the Adjusted Trial Balance.
Helped me so much
:)))