Unit 2 • Lesson 30.8h
Closing Entries: Resetting Temporary Accounts
Students must understand why and how temporary accounts are reset before they can build an automated closing-entry system in later lessons.
What You'll Learn
- ▶Identify which accounts are temporary and which are permanent
- ▶Explain why closing entries are necessary at the end of each accounting period
- ▶Prepare closing entries to zero out revenue, expense, and dividend accounts
- ▶Post closing entries to update Retained Earnings
Key Concepts
Temporary accounts (revenues, expenses, dividends) track activity for one period only
Permanent accounts (assets, liabilities, equity) carry balances forward
The Income Summary account is a temporary clearing account used only during closing
+1 more concepts
Lesson Phases
This lesson follows a structured 6-phase learning model designed for authentic project-based learning.
Hook
Discover why Sarah's revenue and expense accounts must be reset after March
Introduction
Learn the closing-entry procedure step by step with T-account supports
Guided Practice
Close a more complex set of accounts with reduced scaffolding
Independent Practice
Algorithmic deliberate practice on closing entries until mastery
Assessment
MCQ exit ticket on temporary vs permanent accounts and closing-entry logic
Closing
Reflect on closing-entry mastery and preview the full month-end checklist
How You'll Learn
Concrete-to-abstract progression from business story to journal-entry format
T-account visual supports before abstract journal notation
Algorithmic deliberate practice on closing-entry procedure