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QuickBooks Desktop takes care of the closing of your books at the end of every fiscal year, so you don't have to worry about it. As part of its process, QuickBooks makes automatic adjustments to prepare for the upcoming year.
QuickBooks performs certain year-end adjustments based on your fiscal year start month.
- QuickBooks adjusts your Income and Expense accounts at year-end to zero them out so you start your new fiscal year with zero net income.
- QuickBooks makes an adjusting entry to your net income.
- At the start of a new fiscal year, QuickBooks adds the net income from the previous year to your Retained Earnings equity account and subtracts the same amount from your net income. It ensures that you begin each fiscal year with a net income of zero.
For detailed information, refer to this article: Close your books in QuickBooks Desktop.
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