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By the time you docHubed the end of the accounting year, you probably feel like youve done it all. Youve recorded journal entries for revenue recognition, inventory movements, payroll. Youve made your adjusting entries for accruals and prepaids. You produced a trial balance and made error corrections. Prepared the financial statements. Thats pretty much it, right? No, theres one more thing you need to do before you can start the new accounting period: preparing the closing entries. Its the accounting equivalent of saying Happy New Year! In a previous video, I covered understanding debits and credits in accounting by using DC ADE LER. DC Debits and Credits. ADE Assets Dividends Expenses, accounts that usually have a debit balance. LER Liabilities Equity Revenue, accounts that usually have a credit balance. Lets group the accounts slightly differently: into permanent accounts and temporary accounts. Assets, Liabilities and Equity are permanent accounts, their account balance carr