Finalizing Vendor Accounts
Your vendor accounts also are never closed. These feed into Accounts Payable. Although you might enjoy being able to zero out bills due, you don’t get to do it. Instead, as part of the process of finalizing your vendor accounts, you need to be certain you have posted all bills to be paid related to the business year.
You probably will receive bills to be paid at the end of December that you won’t actually pay until January. You need to post these bills to Accounts Payable using an accrual entry. For example, if you got a bill for holiday advertising in December on January 2, you would post that to December expenses.
You would also need to record the details in the vendor account ledger. This would increase the ...