Summary Financial Accounting Notes on Final Account (Journal Entries of Profit and Loss Account) for B.com / BBA / BS / ADP

FINAL ACCOUNT

Lecture # 07

Journal Entries relating to Profit and Loss Account

At the end of the year, the expenses or income related with the profit and loss account
should be closed down transferring into profit and loss account and the result net profit or net
loss should be transferred to capital account. The entries which are made at the end of the year
are known as closing entries related with profit and loss account.


Accounts to be closed:


•   All indirect expenses and losses debited in profit and loss a/c
•   All incomes and gains credited in profit and loss a/c
•   Net Profit
•   Net Loss


1.   Indirect expenses and losses closed transferring into profit and loss a/c


Profit and Loss a/c


To Salaries a/c
To Insurance a/c
To Postage a/c
To Stationery a/c
To Advertisement a/c
To Advertisement a/c
To Legal charges a/c
To Audit fee a/c



1