AC010--Preparing Financial Statements

Preparing Financial Statements[@more@]

1.Financial Closing in the General Ledger
*General Ledger Closing
The posting periods of the old fiscal year are then blocked and special periods for closing entries are opened. Technical reconciliation between transaction figures and documents guarantees that documents are posted without any technical errors.

Foreign currency documents are then evaluated, accrual/deferral documents are posted and GR/IR clearing accounts are analyzed. Following that, the respective accounts are updated.

The special periods can then be closed.
For documentation purposes, the balance audit trail is made and the financial statements are created. Additional reports are prepared for legal reporting purposes.

*The Schedule Manager is available for planning, completing and monitoring complex work processes.

*Accruals
Situation: The expense or revenue belongs to the current period, from an accounting point of view, but is not posted until a later period, because the invoice has not yet been sent or received.

Deferrals
Situation: The expense or revenue was posted in the current period (invoice sent/received), but the actual business transaction, or part of it, is actually incurred in a future period.

2.Cost-of-Sales Accounting
*Two basic methods for structuring profit and loss statements are available:
.Period accounting
.Cost-of-sales accounting
*With period accounting, the total costs of production for the period are subtracted from revenue to calculate gross operating profit. The total production costs for a period equal the change in inventory.

*In cost-of-sales accounting the cost of goods sold is subtracted from revenue to calculate the gross operating profit. In period accounting, the total costs of production are deducted from the revenue.

*An entry is made in this functional area field via:
.A manual entry in the field
.Automatic entry of the functional area through a substitution
.Automatic copying of the functional area entered from the master data of the P&L account
.Automatic copying of the functional area entered from the master data of the CO cost object