Closing Entries
Definition
Journal entries made at the end of an accounting period to transfer balances from temporary accounts (revenue, expenses, dividends) into permanent equity accounts, resetting the temporary accounts to zero for the next period. Part of the month-end and year-end close. HelloBooks generates closing entries automatically.
Related Terms in Core Accounting
Accounts Payable (AP)
Money your business owes to suppliers and vendors for goods or services received but not yet paid for. Tracked as a current liability on the balance sheet. HelloBooks automates AP with purchase orders, GRN matching, and vendor bill management.
Accounts Receivable (AR)
Money owed to your business by customers who received goods or services on credit. Tracked as a current asset. HelloBooks manages AR through invoicing, payment tracking, aging reports, and automatic reminders.
Accrual Accounting
An accounting method that records revenue when earned and expenses when incurred, regardless of when cash changes hands. Required by GAAP for most businesses above a certain size. Contrasts with cash-basis accounting.
Balance Sheet
A financial statement showing what your business owns (assets), owes (liabilities), and the owner's stake (equity) at a specific point in time. Assets = Liabilities + Equity. HelloBooks generates balance sheets automatically from your transactions.
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