1. Why are closing entries required at the end of an accounting period?
2. What is the difference between adjusting entries and closing entries?
3. What types of accounts are closed by transferring their balances (a) as a debit to Retained Earnings, (b) as a credit to Retained Earnings?
4. What is the purpose of the post-closing trial balance?
5. The fiscal years for several well-known companies were as follows:
Company Fiscal Year Ending
Wal-Mart January 31
JCPenney January 26
Best Buy February 28
The Gap Inc. January 31
Federated Department Stores February 3
The Limited, Inc. January 31
What general characteristic shared by these companies explains why they do not have fiscal years ending December 31?