Closing the books generally refers to the accounting process of zeroing out your Income and Expense accounts and recording your company's Net Profit or Loss on the Balance Sheet.
Closing the books lets you control changes to transactions dated before the end of the fiscal year.
At the end of the year, QuickBooks Online automatically closes out your Income and Expense accounts and rolls up your net profit or loss into your Retained Earnings account.
To protect transactions in earlier accounting periods from being changed, you can close the books to any further uncontrolled changes, and set a closing date and password in QuickBooks Online.
Note Both Master and Company Administrators can set the closing date and password.
Set a closing date
You can set a closing date for your books to restrict changes to them, and you can optionally set a password that will be required to make changes to transactions once your books are closed.
To set a closing date:
Select the Gear icon on the Toolbar.
Under Your Company, choose Account and Settings (or Company Settings).
From the left menu, select Advanced.
In the Accounting section, select the pencil (edit) icon to open the fields for editing.
Select the Close the books checkbox.
Enter a Closing Date. Transactions dated on or before this date cannot be changed without warning.
Select either Allow changes after viewing a warning or Allow changes after viewing a warning and entering a password from the drop-down list to specify how to manage attempts to save transactions dated prior to the closing date. If you select Allow changes after viewing a warning and entering a password, the password fields appear.
Enter a closing date password in the Password and Confirm Password fields.