– Alissa loves cinematography and combines her knowledge of hacking and content creation.– We are seeing a fundamental change in cybersecurity because now it isn’t just about information.– Although Alissa knows the risks of having connected technology, she is definitely a consumer of connected devices.– While living in Germany, Alissa got into hacking connected cars.
– Her company shifted from defense contracting to private sector cyber security.She then transitioned back into cyber security.
– Alissa explains her combat training when owning a defense contracting company. – After this experience, Alissa later went on to own a few startups and sold them for millions of dollars. – Alissa shares how she started hacking at the age of 13 and she got caught hacking a government network. Gray, Capital, which now has a balance of $7,260 ($13,200 beginning balance + $1,060 in step #3 for net income - $7,000 in step #4 for withdrawals). Effectively, the balances of these accounts have been absorbed by the capital account – Mr. The expense accounts and withdrawal account will now also be zero. In other words, the income and expense accounts are "restarted".Īfter preparing the closing entries above, Service Revenue will now be zero. The purpose of closing entries is to prepare the temporary accounts for the next accounting period. 31 Retained Earnings 7,000.00 Dividends 7,000.00 Conclusion If this is the case, then this temporary dividends account needs to be closed at the end of the period to the capital account, Retained Earnings. They'd record declarations by debiting Dividends Payable and crediting Dividends. However, some corporations use a temporary clearing account for dividends declared (let's use "Dividends"). Note that by doing this, it is already deducted from Retained Earnings (a capital account), hence will not require a closing entry. When dividends are declared by corporations, they are usually recorded by debiting Dividends Payable and crediting Retained Earnings. To close the drawing account to the capital account, we credit the drawing account and debit the capital account. Our example is a sole proprietorship business. All drawing accounts are closed to the respective capital accounts at the end of the accounting period. In a partnership, a drawing account is maintained for each partner. In a sole proprietorship, a drawing account is maintained to record all withdrawals made by the owner. Step 4: Close withdrawals to the capital account For sole proprietorships and partnerships: This is closed by doing the opposite – debit the capital account (decreasing the capital balance) and credit Income Summary. What if Income Summary had a debit balance? It means that the company had a net loss. For corporations, Income Summary is closed entirely to "Retained Earnings". Gray, Capital 1,060.00įor partnerships, each partners' capital account will be credited based on the agreement of the partnership (for example, 50% to Partner A, 30% to B, and 20% to C). The Income Summary balance is ultimately closed to the capital account. Remember that net income is equal to all income minus all expenses. Notice that the balance of the Income Summary account is actually the net income for the period. It would then have a credit balance of $1,060. In step 1, we credited it for $9,850 and debited it in step 2 for $8,790. 
Now for this step, we need to get the balance of the Income Summary account.
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