Purpose
The Close Periods module allows users to manage and close accounting periods, ensuring all necessary entries are posted before finalizing a period or year. TRUE Accounting automatically calculates and creates closing journal entries to return temporary account balances to zero on the general ledger in preparation for the new accounting period.
Month-End & Year-End: Closing periods is essential for accurate financial reporting. The module displays revenue, COGS, gross profit, expenses, and net income for each period, along with the status of closing entries (posted or pending).
List View
View all accounting periods with financial summaries and closing status
| Column | Definition |
|---|---|
| Accounting Period | Displays accounting periods (months) for the year. Click to expand and view details. |
| Revenue | Total amount received from selling goods and/or providing services to customers during the period. |
| COGS | Cost of Goods Sold. Total cost of expenses required to provide a service or product. |
| Gross Profit | Revenue minus Cost of Goods Sold. Shows profitability before operating expenses. |
| Expenses | Total remaining expenses (usually administrative or selling expenses) used to produce revenues. |
| Net Income | Gross profit minus expenses. The bottom line profit or loss for the period. |
| Closing Entry | Status of closing entries: Posted (entries have been posted) or Pending Entry (awaiting posting). |
| Padlock Icon | Green padlock = Month is open for adjustments and posting. Red padlock = Month is closed and closing entries have been created to zero out temporary accounts. |
| Option | Definition |
|---|---|
| Quick Search | Enter a year in the Search bar at the top left to find a specific accounting year's periods. |
| Action | Definition |
|---|---|
| Close Year | Button to close the entire fiscal year. Only works after all month-end closing entries have been posted. Typically selected after all adjusting journal entries are complete. |
| Summary Totals | Footer displays year-to-date totals for revenue, COGS, gross profit, expenses, and net income for the current fiscal year. |
Select periods using checkboxes to enable batch operations:
| Option | Definition |
|---|---|
| Recalculate | Recalculates the revenue, COGS, expenses, and net income amounts for selected periods. Use after posting adjusting entries. |
| Close | Closes the selected periods and creates the closing journal entries to zero out temporary accounts. |
FAQ
Closing Periods
Closing a period creates journal entries to zero out temporary accounts (revenue, expenses) and transfer the net income to retained earnings.
- Navigate to Financial > Journal > Close Periods
- Review all periods to ensure entries are complete
- Check the box next to the period(s) you want to close
- Click Close in the batch options
- The padlock icon will change from green to red indicating the period is closed
Note: Closing entries are automatically calculated and created by TRUE Accounting. Review the amounts before closing to ensure accuracy.
Before closing the fiscal year, ensure all financial records are accurate and complete:
- Post all adjusting journal entries
- Reconcile all bank accounts
- Close all monthly periods (all months must show closed status)
- Review and verify all financial reports
- Make any final depreciation or accrual entries
- Click Close Year to finalize
If you need to make adjustments to a closed period, you have options depending on your needs.
Option 1: Reopen the Period
- Contact your system administrator to unlock the period
- Make the necessary adjustments
- Re-close the period
Option 2: Post to Current Period
- Create adjusting entries in the current open period
- Use proper accounting treatment for prior period adjustments
The Close Year function requires all monthly closing entries to be posted first.
Common Causes:
- One or more months still show "Pending Entry" status
- Some periods have not been closed (still show green padlock)
- There are unposted journal entries in the fiscal year
To Resolve:
- Review all periods for the year
- Close any periods with green padlocks
- Check for pending entries and post them
- Try Close Year again
The padlock icons indicate the status of each accounting period:
Green Padlock (Open):
- The month is open for adjustments
- Journal entries can be posted to this period
- Closing entries have not been created yet
Red Padlock (Closed):
- The month is closed
- Closing journal entries have been created to zero out temporary accounts
- No new entries can be posted to this period without reopening