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Reh2339
Sep 22, 2009, 01:49 PM
I have an increase at the end of the period in my inventory-I need to do an adjusting entry before I do closing entries...

Would I ADJUST the entries to:
Inventory and Income Summary BEFORE doing all the other closing entires?

The difference would leave a $20,710 CREDIT balance in Income Summary...
Example:
Account Dr Cr
Income Summary 69,900
Inventory (beg) 69,900

Inventory (ending) 90,610
Income Summary 90,610

Leaves a 20,710 credit balance in Income Summary....then when I go to do all my closing entires...just procede as normal...

AM I MISSING SOMETHING????? HELP...so confused.
pready
Sep 22, 2009, 11:10 PM
The difference between your revenues and expenses close out to your income summary account, then the difference between your debits and credits is either debited or credited to your retained earnings account so that your income summary account is zeroed out.