Closing Entries in Accounting || Closing Journal | - Basics of Accounting | Mr. Shiv Raj Singh

Closing entries, also called closing journal entries, are entries made at the end of an accounting period to zero out all temporary accounts and transfer their balances to permanent accounts. In other words, the temporary accounts are closed or reset at the end of the year. This is commonly referred to as closing the books.
Temporary accounts are income statement accounts that are used to track accounting activity during an accounting period. For example, the revenues account records the amount of revenues earned during an accounting period-not during the life of the company. We don’t want the 2015 revenue account to show 2014 revenue numbers.
Permanent accounts are balance sheet accounts that track the activities that last longer than an accounting period. For example, a vehicle account is a fixed asset account that is recorded on the balance. The vehicle will provide benefits for the company in future years, so it is considered a permanent account.
At the end of the year, all the temporary accounts must be closed or reset, so the beginning of the following year will have a clean balance to start with. In other words, revenue, expense, and withdrawal accounts always have a zero balance at the start of the year because they are always closed at the end of the previous year. This concept is consistent with the matching principle.
Closing Entry Types
Temporary accounts can either be closed directly to the retained earnings account or to an intermediate account called the income summary account. The income summary account is then closed to the retained earnings account. Both ways have their advantages.
Closing all temporary accounts to the income summary account leaves an audit trail for accountants to follow. The total of the income summary account after the all temporary accounts have been close should be equal to the net income for the period.
Closing all temporary accounts to the retained earnings account is faster than using the income summary account method because it saves a step. There is no need to close temporary accounts to another temporary account (income summary account) in order to then close that again.
Both closing entries are acceptable and both result in the same outcome. All temporary accounts eventually get closed to retained earnings and are presented on the balance sheet.

[@sahajsingh6335]

Bahot achaa explain Kiya sir we are glad ki aap jese teacher h jinse hme padhne ka mauka mila .. best explanation sir ..m closing entry m bahot confuse tha .. kon se account se close krna h .. it's very helpful.. thaku sir 🙏

[@panchamisingh6949]

Thank you sir

[@sasivengasseri6389]

Thank you sir...Good class

[@Spartan-jr1dy]

Im so lucky I understand hindi and speak Urdu. This is a really good video for some problems I was having.

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[@rajenddrank8638]

Thank you Sir. Excellent class.

[@shwetatiwari5984]

Great sir , thank very much sir

[@isha6281]

Thank you sir for this wonderful explanation.

[@vishaljoshi7317]

Easy going to understand of closing entry wow

[@user-cb3sc3bd2r]

Mza agya

[@sushmitasah3492]

Amazing.. totally cleared

[@sumansharma2061]

Very precise and clear explanation sir, you did a great job , stay blessed and keep it up your great work!!!!

[@gauravbhardwaj9573]

Nicely explained

[@susantadash444]

Nice explained

[@swatipandey7512]

Very helpful. Thank you

[@anonymoususa222]

His voice is like Modi hi🤗😂❣️

[@anandraj28808]

Thanks 🙏🙏🙏🙏🙏 sir ....lots of love from Nepal.........all confusion get cleared

[@ashishgamers1469]

Thanks sir it's very helpful for me .

[@akashmaurya910]

All doubts cleared after watching this video 🙏🙏

[@NiteshKayatVlogs]

Great work sir. Thankyou very much 👍

[@tana2207]

Wowwww. Excellent explanation. Now I am crystal clear on logic behind closing entries. Thank you sooooooooo much sir ji. Please doing more videos.
Your knowledge in accounting is beyond par. We need teachers like you.
Liked, subscribed and shared.

[@aspirantneeraj1631]

Thank-you sir it helped me alot 🙏

[@jayanider7596]

thanx sir ji

[@janaksharma330]

Thanks a lot lot sir🙏🙏🙏🙏

[@MsSaadtariq]

love from Pakistan. great work

[@isha6281]

💯 concept clear.

[@gopaldutta5999]

Sir
When we calculate valuation of closing stock at that time direct expenses like carriage inward will be considered?

[@saurabh6132]

good , keep uploading

[@GuruKpoEducationalVideos]

Thanks for your Appreciation. If like our videos please do subscribe our channel.
For motivational & Inspirational videos by motivational speaker and career counselor Dr. Sanjay Biyani you can subscribe to th-cam.com/channels/uM4VkR2tE6FBaJsBT-4XVg.html
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[@sumitverma2680]

Bahut achye se samjh a gya thanks sir

[@SanthoshKumar-yq6xb]

Very Well Explained Sir.

[@yogeshpatel9749]

Thank u sir

[@vikramithape]

Nice sir

[@Sonia-ug2oc]

Easy to understand. Please tell if you have any more videos about accounting. I subscribed you, but did not see more videos from you in acconting.
Thanks

[@mdparwezalam_]

Thank you so much sir

[@suhailshah4100]

Nice helpful video sir aur videos closing entries with reason ke sath upload kr dena sir journal proper ki entries

[@dr.manojkumaryadav6357]

Very nice teaching sir

[@siddeshwaraprasad8876]

Thank you so much sir 😊

[@siddeshwaraprasad8876]

Sir why closing stock is debited to trading account

[@vinaysati2139]

helpful video sir :-}

[@aalokpatel414]

How will pass Ledger book closing banak balance amount , journal entry for next year.

[@arhussain3763]

Sir very good

[@gentle2005phir]

Super

[@AshokKumar-rh7ey]

👍🏻👍🏻

[@GuruKpoEducationalVideos]

good...

[@gopaldutta5999]

Sir
Trading is nominal account?And you said trading account transferred to profit and loss account,but we closing trading account c/d or b/d to profit and loss account why?

[@sambhavjain9300]

sir jb hmne trial balance bnya hoga toh hmne nominal account ko profit and loss account se close m nhi kiya hoga

[@gopaldutta5999]

Sir
Why trading account closing entry gross profit or gross loss c/d or b/d used?

[@sahajsingh6335]

Bhai it is a rule and we can't changes rules ..

[@rohanfernandes920]

👍

[@user-jq6xz5ww6g]

Generally, how many we have closing entries sir

[@Vibrant_tulips]

Ye purchase return ki journal entry hoti hai kya...
Purchases return Dr. Kyu kiya

[@AKSHAY_EDGE]

👌👌👌👌🙏🙏🙏

[@user-jq6xz5ww6g]

I think sir, four

[@priyankavarma094]

Thanks very much sir
This video is very helpful apne explain bhut achha kiya h
Sir Maine apke according apni balance sheet ready kiya h but usme Ek problems aa rhi h gross profit and net profit ka amount profit and loss account me equal show ho rha h
Aur expenses ka ledger show ho rha h but amount nhi show ho rha h ..
How to solve this problem plz help me
Can I give me your whatsapp no. For solve this problem Plz......

[@ShwetaSharma-vl2jl]

:)

[@theacademicninja5622]

15:46
Sir l understood every topic except one...
That is...
Closing stock is our asset, which a debit balance... but if we close it... then we have to credit closing stock and debit trading account
Entry wil we
Trading A/c ...... dr.
To closing stock A/c
Plz help if anyone....

[@balwindersingh4057]

As far as i know see for opening entry , The entry is ：trading a/c dr ..to opening stock because opening stock will go to the dr side of trading a/c as “To opening stock” and on the other hand closing entry is ：closing stock dr...to trading a/c so that it will go to the credit side of trading Account as “by closing stock” focus on the point that how it will go in the trading A/c . Ypu are saying that trading A/c should be debited and “to” closing stock should be credited ryt？but see if u done so then You have to record it in the trading A/c as “to closing stock” on debit side which is Definately a wrong thing！closing stock never go in the Debit side of trading a/c （as per your journal entry）hope u will get it！plz rectify me if im wrong

[@anandraj28808]

@@balwindersingh4057 nice explain

[@ridoysiddha1716]

My 80 mb waste!

[@shubhamsachdeva6969]

thank you sir

[@ATUlKumar-xs4ht]

Thank you sir

[@priyanshijain1973]

Thank you sir