Closing the Books
Income and expense accounts are balanced and zeroed out on a regular schedule. Closing the books enables business leaders to clearly determine income and expenses that occurred during a specific time.
- Closing the books allows companies to compare numbers from one period with numbers from another.
- Numbers from a closed period remain static, which prevents errors, such as when an accountant uses an old date to enter data in the accounting system.
- List the advantages of using computerized accounting systems.
- Retained earnings are updated with the net income or loss for the period.
