I'd be glad to provide details what will happen when closing books in QuickBooks, PastorRob.
Aside from locking your data, it will also create a couple of adjusting entries when closing out your books. For example:
- Income and expense accounts will be zeroed out for the new fiscal year to start with zero earnings..
- The program will make an adjusting entry to your net income. For example, if your profit for the year was $12,000, the equity section of your Balance Sheet shows a line for a net income of $12,000 on the last day of your fiscal year.
- At the start of the new fiscal year, the program will also increase your Retained Earnings equity account by the previous year's net income ($12,000 in this example). Then, it will decreases your net income by the same amount. This way, you start each new fiscal year with a net income of zero.
However, your receivables, payables, outstanding credits, and debits will still remain. Follow these steps on how to close your books in QuickBooks:
- Go to the Company menu and look for Set Closing Date.
- Click Set Date/Password.
- Enter the closing date and password.
- Choose OK.
Feel free to check this article for more details: Close Your Books in QuickBooks Desktop.
Let me know if that's all the information you need about closing books. I'd be glad to jump right back if you need more help from us.
