Closing Asset Ledger Account

This is how an asset ledger looks like before closure:

Cash Account (Asset)

Debit

Credit

01 Dec 2011 - Share Capital

$10,000

15 Dec 2011 - Salaries Expense

$2,000

15 Dec 2011 - Bank Loan

$10,000

31 Dec 2011 - Salaries Expense

$3,000

15 Dec 2011 - Sales Revenue

$7,500

-

31 Dec 2011 - Sales Revenue

$7,500

-

In order to close the account, we must first total both sides. The credit side adds up to $5,000 where as the debit side adds up to $35,000. Therefore, as $35,000 is higher than the total of credit side, we write this amount at the end of both sides.

Closing figure is the balancing figure on the credit side which in this case is $30,000 (35000 – 2000 – 3000).

Being a balance sheet ledger account, the closing balance will be carried forward to the next accounting period.

This is how the asset ledger will look like after closure:

Cash Account (Asset)

Debit

Credit

01 Dec 2011 - Share Capital

$10,000

15 Dec 2011 - Salaries Expense

$2,000

15 Dec 2011 - Bank Loan

$10,000

31 Dec 2011 - Salaries Expense

$3,000

15 Dec 2011 - Sales Revenue

$7,500

-

31 Dec 2011 - Sales Revenue

$7,500

31 Dec 2011 - Balance c/d

$30,000

$35,000

$35,000

The closing balance amount of $30,000 will be posted in the trial balance in respect of cash.

Share This Post

Share on facebook
Share on twitter
Share on linkedin
Share on print
Scroll to Top