Finalizing the General Ledger
There isn’t anything you need to do to close balance sheet accounts. They never actually close. Instead, their balances are carried forward. You wouldn’t close a checking account and reopen a new one at the start of the next year. The same is true for all Assets, Liabilities, and Equity accounts. Bet you wish you could just zero out those liabilities in the same way we’ll be zeroing out the P&L accounts.
You want to note your balances as of December 31 so you can prepare your year-end balance sheets, but that is just so that you have a snapshot of your business. You shouldn’t record these year-end balances until you are positive that you have made all the adjusting entries for the year.