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In effect, all transactions with the proprietor are recorded in one account – Proprietor’s Capital. Because of this, the four closing entries for a proprietorship are slightly different from those of a corporation:
Figure 12.1 compares the closing entries for a proprietorship and a corporation, assuming revenue of $10,000, expenses of $6,000, and withdrawals/dividends of $1,000 for the year ended December 31, 2016.
Figure 12.1 Comparing Closing Entries for a Proprietorship and Corporation
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