A finished ACC-240 Topic 4 closing entry sequence example, recording four closing entries in order, showing each temporary ledger at zero and ending on a post-closing trial balance. Searches like "acc 240 topic 4 assignment example", "acc240 topic 4 sample" and "acc-240 topic 4 example" land here.
What a finished ACC-240 Topic 4 closing entry sequence looks like
What the example contains is four closing entries and the ledger evidence that each one worked. It begins with an adjusted trial balance, from which every temporary account is identified by name: service revenue, each expense, and the owner's withdrawals. The first entry transfers revenue into income summary; the second transfers each expense; the income summary then carries the period's net income, which the third entry moves into capital; the fourth closes withdrawals directly to capital. After each entry the affected ledger accounts are shown at zero. The ending capital figure is reconciled to the statement of owner's equity, so the two agree to the dollar. A post-closing trial balance lists assets, liabilities and capital only. All figures are illustrative and consistent throughout.
How an ACC-240 Topic 4 example is structured
The sequence runs in the order the entries are recorded, with a check after each. It opens with the adjusted trial balance and a short list separating temporary accounts from permanent ones, because deciding which accounts close is the first decision the topic marks. The revenue entry follows, then the expense entry, each with the income summary account shown in T-form so its balance can be read at every stage. The third part closes income summary to capital and states the amount as net income, cross-referenced to the income statement. The fourth part closes withdrawals, which bypass income summary entirely. A fifth part shows every temporary ledger at zero. The last part presents the post-closing trial balance and a sentence matching ending capital against the owner's equity statement.
Temporary and permanent sorted first
Revenue, expenses and withdrawals are named as the accounts that close, while assets, liabilities and capital are named as the ones that carry into next period.
Income summary read at every stage
Showing the summary account after each entry lets a reader watch it collect revenue, absorb expenses and settle at the period's net income.
Withdrawals closed straight to capital
Owner withdrawals never pass through income summary, because they are distributions rather than expenses, and routing them there would misstate net income.
Zero balances shown, not claimed
Each temporary ledger appears after closing with its zero balance visible, which is the evidence that the entry reached every account it was meant to.
Capital agreed to the equity statement
The ending capital balance in the ledger is matched to the statement of owner's equity, so the closing process and the statements confirm each other.
Where marks go in ACC-240 Topic 4
Losses on this topic are concentrated in the order and the targets of the closing entries. Closing withdrawals through income summary understates the net income that account is supposed to report, and a marker comparing it with the income statement sees the gap at once. Sequences that close a permanent account, most often accumulated depreciation or unearned revenue, have misunderstood what closing is for. Entries that debit the expense accounts when closing them, rather than crediting them, double each balance instead of clearing it. A post-closing trial balance still carrying revenue or an expense shows that a closing entry was missed. Work that jumps from the adjusted trial balance to ending capital in one step skips the process the assignment typically wants seen, and loses marks even if the final figure is right.
Get an ACC-240 Topic 4 example written to your instructions
Send the ACC-240 Topic 4 instructions, the rubric and the adjusted trial balance your assignment supplies. We write a custom example to them, with temporary accounts identified, each closing entry recorded in order, every ledger shown at zero and a post-closing trial balance that ties to ending capital, in 24 to 48 hours. The first one is free.
ACC-240 Topic 4 questions, answered
Why close accounts at all?
Because revenue, expense and withdrawal balances measure one period and must start the next one at zero. Without closing, next year's income statement would include this year's revenue. Closing also moves the period's result into capital, which is how net income and withdrawals change what the owner has in the business. Permanent accounts carry forward because they describe where the business stands, not what happened during one period.
Is the income summary account required?
Not always. Some textbooks and many software systems close revenue and expense accounts directly to capital. The income summary is useful in coursework because its balance after the first two entries equals net income, which gives a built-in check against the income statement. If your section uses it, the rubric will usually expect that check to be shown.
What belongs on a post-closing trial balance?
Only permanent accounts: assets, contra assets such as accumulated depreciation, liabilities and the owner's capital at its new ending balance. Any revenue, expense or withdrawal balance still showing means a closing entry was missed or posted wrongly. Its debits and credits must still agree, and its capital figure should match the statement of owner's equity exactly.