Expense Account The types of expense accounts in a company are divided into two direct expenses that need to be borne by the company and indirect expenses for the company. An example of a direct expense that often occurs in companies is when a company orders raw materials generally does not make payment immediately so in this case it is included in direct expenses.
Indirect expenses can be in the form of debt for additional assets sms gateway usa that are due. Understanding closing journals Closing Journal financial reporting period as part of the financial closing process. They are used to empty income and expense accounts for the period also referred to as temporary accounts to move balances to permanent accounts on the balance sheet such as retained earnings or shareholders equity.
This resets the revenue and expense accounts for the next reporting period. This is usually done using a temporary income summary account that contains all of a companys revenues and expenses or its net income for the current accounting time period. Closing entries are journal entries made at the end of an accounting period that involve moving data from temporary accounts on the income statement to permanent accounts on the balance sheet.