Closing Entries

Definition

Journal entries made at the end of an accounting period to reset revenue, expense, and dividend accounts to zero so they're ready for the next period. Permanent accounts (assets, liabilities, equity) are not closed.

Related Terms

Accounting Cycle

The complete sequence of steps a company takes to record, process, and report financial transactions during one accounting period. It's like the orbit of the Earth: it starts, completes a full rotation, and then starts again.

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