What is the correct order for the steps in the closing process?
I Transfer the profit or loss to the owner's capital account
II Balance the owner's capital account
III Close the drawings account to the owner's capital account
IV Close the income and expense accounts to the profit or loss summary account
A) III, IV, II, I
B) I, II, III, IV
C) IV, III, I, II
D) IV, III, II, I

Question

Quizplus · Accepted Answer

The correct order for the closing process in accounting is to first close the income and expense accounts to the profit or loss summary account (IV), then close the drawings account to the owner's capital account (III), transfer the profit or loss to the owner's capital account (I), and finally balance the owner's capital account (II).

What Is the Correct Order for the Steps in the Closing