Bookkeeping For Dummies, 2nd Edition

Chapter 22

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 another division of time if it makes business sense). At the end of every accounting period, certain accounts need to be closed while others remain open.

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

In this chapter, I explain the accounts that must be closed and started with a zero balance in the next accounting cycle ...