Closing the Year for General Ledger
- This procedure should be run only after all entries made to the fiscal year are posted.
- To close the journal, it must be a writable journal.
To close the year for the General Ledger:
Suppose the following entries were the financial activity for a company for the fiscal year of January 1 to December 31 using the following accounts:
| Account | Description |
|---|---|
| 10000 | Assets |
| 20000 | Liabilities |
| 30000 | Owner's equity |
| 40000 | Revenue |
| 50000 | Expense |
Example of Ending Balances on December 31:
| Account | Balance |
|---|---|
| 10000 | 100,000.00 |
| 20000 | (64,500.00) |
| 30000 | (20,000.00) |
| 40000 | (23,500.00) |
| 50000 | 8,000.00 |
Example of Year End Entries:
| Account | Balance |
|---|---|
| 30000 | 15,500.00 |
| 40000 | 23,500.00 |
| 50000 | (8,000.00) |
Example of Ending Balance on December 31 after Year End Balance:
| Account | Balance |
|---|---|
| 10000 | 100,000.00 |
| 20000 | (64,500.00) |
| 30000 | (35,500.00) |
| 40000 | 00 |
| 50000 | 00 |
No entries were generated for Accounts Receivable of Cash, because they are asset accounts. Only revenue and expense accounts are closed out.