Hi,

Can someone tell me on how to close an account at the year end and carry fwd it to the next year. An example would be helpful.

Thanks in advance.

If it's going to be carried forward into the next year, then it isn't closed.

It would be helpful if you could give an example of what you are referring to.

Is it that all P/L accounts are closed and Balance sheet accounts are carried forward? How do I carry fwd a B/S account at the end of the year?
Eg: A/C Receivable or payable?

Roll it forward?

All the P&L accounts close, as well as drawing/dividend or whatever you're calling it. And balance sheet accounts do carry forward. Do remember that the P&L accounts are closed out to equity (either capital or retained earnings). Have they been closed out?

"How" you carry them forward is actually semantics. For instance, if you're doing things manually, you can draw a line and then just bring down the balance, date it Jan 1, and call it "Balance Forward." Or start a new page for that account and do the same thing. If you're using software, it would happen automatically when you tell it to close the year out. (If it doesn't, it's really bad software.)

There's no entries or anything like that, if that's what you're thinking.

Does that answer the question? If not, clarify more.

Thank you so much. In a software, what about the adjusting entries at the year end. Does it take care of itself ?

Oh, by no means. Software can't possibly know what needs adjusted. Don't take this the wrong way (just being honest), but if you think software would know what adjusting entries you need to do and "take care of itself," I suspect you don't know enough to be attempting to do this yourself.

It can do recurring entries, but someone still needs to enter them and know they're recurring. And most adjusting entries are at least changing dollar amounts, and many of them are fairly random based on what's going on.

Not to mention that adjusting entries are done before that closing you're attempting to do.