This is how an income ledger looks like before closure:
| Sales Revenue Account (Income) | |||
|---|---|---|---|
|
Debit |
Credit |
||
|
|
- |
15 Dec 2011 - Cash |
$7,500 |
|
|
- |
31 Dec 2011 - Cash |
$7,500 |
In order to close the account, we must first total both sides. The credit side adds up to $15,000 where as the debit side does not contain any balance. Therefore, as $15,000 is higher than the total of debit side, we write this amount at the end of both sides.
Closing figure is the balancing figure on the debit side which in this case is $15,000.
Being an income statement ledger account, the closing balance will transferred at the period end to income statement.
This is how the income ledger will look like after closure:
| Sales Revenue Account (Income) | |||
|---|---|---|---|
|
Debit |
Credit |
||
|
31 Dec 2011 - Income Statement |
$15,000 |
15 Dec 2011 - Cash |
$7,500 |
|
|
- |
31 Dec 2011 - Cash |
$7,500 |
|
|
$15,000 |
|
$15,000 |
The closing balance amount of $15,000 will be posted in the trial balance in respect of sales revenue.