“On this page, you will find everything related to the Period Closure page, including how to access it, its concept, features, and the process of closing a financial period.
To access the “Period Closure” page, please follow these instructions:
- Start by clicking on the “Finance” menu in the main menu.
- Then, click on “Financial Structure” available in the top toolbar of the page.
- Next, click on the “Period Closure” link.
Using these steps, you can easily access the Period Closure page.
Concept of “Period Closure”:
Period closure in accounting is a process undertaken by companies and organizations to finalize their accounting records and prepare final financial data for a specific period, whether it’s monthly, quarterly, or annually. Period closure involves several steps and procedures aimed at recording and documenting all financial events that occurred during that period and preparing the necessary financial reports and data for decision-making and compliance with financial reporting requirements.
- Closing the financial period is a mandatory accounting step that involves recording financial transactions and documenting all financial transactions that occurred during the accounting period, including revenues, expenses, investments, debts, and any other changes in assets, claims, and liabilities. It also involves reviewing accounts and reconciling financial accounts to ensure their accuracy and completeness.
- It includes preparing key financial statements such as the income statement, balance sheet, and cash flow statement, as well as closing the income and loss accounts realized during the accounting period and recording them in the accounting records.
- It involves preparing the final financial reports that illustrate the company’s performance during the accounting period. These reports include financial analysis and information about the overall performance of the company.
- After performing these accounting steps, it becomes necessary to close the period and secure it so that no changes can be made to the financial information after this point.
Closing the accounting period is an important process because it allows management, shareholders, and external parties to understand and accurately evaluate the company’s performance during that period. It is also necessary to comply with financial reporting standards, accounting laws, and tax regulations.
Explanation of the “Financial Period Closure” Procedure:
- Selecting the Required Date: To begin the financial period closure process, you must first select the final date of the period you wish to close. It is essential not to make any modifications, additions, or deletions to any documents dated before this specified date.
- Scope of Period Closure: The closure process includes only documents related to the transfer of daily entries and dealing with financial accounts. Documents unrelated to these operations are not included in the closure process.
- Clicking the Period Closure Button: Once you have selected the desired date and ensured that the relevant financial documents pertain to the transfer of entries and accounts, you can now click the “Period Closure” button. This action secures the financial period, preventing any further modifications or changes to the financial information.
By following these steps, companies and organizations can easily and accurately conduct financial period closure operations. This allows them to comply with accounting standards, financial laws, and ensure the accuracy of financial data for providing accurate reports to management, shareholders, and external parties.”