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Bookkeeping year end journals

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  • 11-11-2020 10:56pm
    #1
    Jennybooks
    Registered Users Posts: 2 ✭


    The company I am working for are just about to year end their accounting package but I am confused as to what journals need to be done. I know the expenses need to be 0 going forward to the next year but what is the double entry of this and how does it work if I just transfer the balance to another nominal account won’t that just bring the balance forward in another nominal account?
    Any light shed on this would be great!!


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    #2
    LaQuica
    Registered Users Posts: 19 ✭LaQuica


    With regards to the expenses, for example if you had a rent expense of €100,000.

    Dr Rent - SOPL €100,000 Cr Rent Expense €100,000

    This effectively just transfers the expense across to the P/L and your expense account will start again at 0 for the following year. You'd do this for all your profit and loss accounts and then the balances would be brought forward through retained earnings, as either a profit or loss for the financial year.


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    #3
    marizpan
    Registered Users Posts: 443 ✭✭marizpan


    Jennybooks wrote: »
    The company I am working for are just about to year end their accounting package but I am confused as to what journals need to be done. I know the expenses need to be 0 going forward to the next year but what is the double entry of this and how does it work if I just transfer the balance to another nominal account won’t that just bring the balance forward in another nominal account?
    Any light shed on this would be great!!


    There are no journals required.
    The software should have a rollover option that locks the prior year.
    The p&l report are produced based on the reporting period only.
    The profit is automatically reflected in reserves.


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