By Leanna Kelly Financial records don’t just “end” when the fiscal year does. Companies often have a variety of accounts still open and active. To “close the books” on the period and establish the baseline for the next one, companies need to close active accounts using a closing entry.
A closing entry is a journal entry made at the end of an accounting period to zero-out temporary accounts and shift their balances to permanent accounts. These temporary accounts can be revenue, expenses and dividends—all of which can be closed out at the end of the fiscal year. The process of closing these …read more
