This exercise illustrates the preparation of closing entries and discusses their importance.

The recording and posting of closing entries is a required step in the accounting cycle.


  1. Prepare the closing entries for Carl”s Video Service, Inc. at April 30, 2014.
  2. Discuss the two reasons why closing entries are prepared.
  3. Prepare a post-closing trial balance for Carl”s Video Service, Inc.
  4. Explain why a post-closing trial balance is prepared and indicate what type of accounts will appear on the post-closing trial.