YEAR END CLOSING PROCESSES:

To evaluate profit and loss, a fiscal year closing report is provided at the end of each fiscal year.

Fiscal year closing involves the following steps:

•      Closing the fiscal year using the Accounting Period option.
•      Generating a year-end closing entry using the Close Income Statement option 
•      Posting the year-end closing entry.

Close the Fiscal Year:

In the Search box, enter Accounting Periods, and click the related link.

On the Process tab, click Close Year. You will receive a message about the year to be closed. This year is suggested based on the earliest open year, and the corresponding check marks in the New Fiscal Year field.

        Below image of receive message.

 Closed and Date Locked fields for all periods in that fiscal year are selected and they cannot  cleared any longer.

Transferring Income Statement Account Balances:

The Close Income Statement batch job transfers the income statement account balances to an account in the balance sheet and it closes the income statement accounts. The Close Income Statement batch job also creates lines in a journal that are posted manually.

In the Search box, enter Close Income Statement, and click the related link.

      

Run the Close Income Statement batch job to transfer the balances to the retained earnings (equity) account.

Posting the Journal:

When the journal is posted, one or more entries are posted to each income statement account so that its balance becomes zero. Also, the retained earnings account is updated for the gain or loss.

  

An entry is posted to each income statement account so that it has a zero balance. The year-end result is transferred to the balance sheet.