Month end close activity

Hi Pavan,

The Entire month close structure would be as follows,

Firstly, all sub-ledgers bookings have to be closed before starting into month close activities.

Subledgers are accounts receivable (AR) , accounts payable (AP) , treasury (bank) and fixed assets (FA) and those booking interfaced to main books. 

Then General Ledger team will start to book the Journals which are apart from above sub-ledgers related, normally it would be accruals, prepayments, adjustment journals, allocations etc... 

Accrued expenses refer to booking of particular period expenses though the invoice copy yet to be received in later period. For e.g, if the rent expenses for particular period/month (Apr) is Rs.1000 but the invoice copy has to be received in subsequent period (may) , so that expenses has to be captured in that April month as accrual and that expenses has to be reversed in May month once original invoice is reced.

Accrual :Dr. Rent Expenses Cr Accrued Expenses

Reversal : opposite to original accrual