Bookkeeping All-In-One For Dummies

Chapter 5

Prepping the Books for a New Accounting Cycle

In This Chapter

Wrapping up General Ledger accounts

Looking back through customer accounts

Checking for unpaid vendor bills

Clearing out unnecessary accounts

Transitioning into a new accounting cycle

In bookkeeping, an accounting period or cycle can be one month, a quarter, or a year (or any other division of time that makes business sense). At the end of every accounting period, certain accounts need to be closed, while others remain open.

Just as adding accounts to your bookkeeping system at the beginning of a year is best (so you don’t have to move information from one account to another), waiting until the end of the year to delete any accounts you no longer need is also a smart idea. With this approach, you start each year fresh with only the accounts you need to best manage your business’s financial activities.

This chapter explains the accounts that must be closed and restarted with a zero balance in the next accounting ...