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Closing The Fiscal Year | Odoo Accounting - YouTube
Channel: Odoo
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greetings Oh doers our company stealthy
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would Inc has proved to be successful
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this year and we've just started a new
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fiscal year this means that it's time
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for us to close the last fiscal year and
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generate all of our financial statements
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these reports we use to analyze and
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review our company's business operations
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and performance now most companies
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mirror the calendar year meaning that
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their fiscal year ends on December 31st
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however this is not mandatory and it's
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up to us to decide which time of the
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year best suits us at stealthy Wood Inc
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we decided to stick with the super 31st
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by the way if you're watching this video
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around that time happy new years now
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before closing the year and generating
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the statements we have to make sure that
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everything is in order and accurate to
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do so I have a small checklist that can
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help first things first I make sure that
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all invoices bills and expenses are
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recorded and validated and oh do most of
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the time I have to chase after the
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employees who kept the receipts
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perfectly organized in their pockets
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I also reconcile everything that is not
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yet reconciled
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this includes all transactions for my
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cash and bank accounts as well as
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reconciling my bank statements to be
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sure that they are an agreement with my
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bank balances and owed - it's also time
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to close the clearing and suspense
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accounts and leave their balances at
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zero these are both temporary accounts a
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clearing account allows us to record a
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transaction and hold it for later
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posting once we are sure to which
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account it goes and a suspense account
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is used when there is a problem or an
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uncertainty and we still want to record
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an amount for example when a customer
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sends us a certain amount of money but
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we still have to investigate to be sure
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we apply it to the correct invoice or
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invoices now a tricky aspect of
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accounting is that values and payments
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are not really limited by a legal date
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nor can always be valued only once a
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year still they have to be clearly
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recorded for the yearly statements to be
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accurate then I verified the balance
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sheet items and the book entries for the
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depreciation journal entries this is
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when some things such as a car loses
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value over the years since they last
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more than one
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here and depreciate with time the value
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has to be adjusted every year in our
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accounting
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I also makes sure that the deferred
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revenues are correctly recorded deferred
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revenues are pre payments from a
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customer making us in debt of a product
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yet to deliver or service surrender
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finally I double check our accrued
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revenues and expenses accrual accounting
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is a method that recognizes a company's
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performance when the economic events
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occur and not when the cash transactions
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are made for example a construction
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company who works on a two-year project
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will record each month a part of the
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grand total as accrued revenues rather
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than the few times that they are paid as
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for the accrued expenses it's the same
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logic an expense belongs economically to
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a certain time but is paid later as it
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can be for our employees wages that we
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pay on the first of the following month
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of course the way all of this is dealt
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with greatly varies according to the
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company's localization and the way
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accountants work and do their magic to
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help with that odoo does its own kind of
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magic reports are created in real time
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and closing and opening injuries are
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automated as well based on the previous
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year's entries with this we can focus
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more on what matters so let's see how we
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can do this without do all right so here
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I am on my database specifically on the
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accounting applications so let's go
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straight to configuration settings
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remember settings page we're gonna
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scroll down to the fiscal period section
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all right so here we can go ahead and
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define the last day of our fiscal year
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so by default it's going to be December
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31st all right but you can go ahead and
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change this if you need to and if you
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would like to define a fiscal year
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that's more or less than a year you can
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select this option and go ahead and save
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and then come back to configure however
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we're not gonna do that so I'm gonna
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discard this and then we're gonna go
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back to our apps overview go to settings
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users and companies users I'm gonna
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select my user go to edit alright and
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then we're gonna check out this
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accounting and Finance section all right
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so here we have different levels of
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access for our users so we can say
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billing accountant advisor or nothing
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simply alright but without going too
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much into detail I just want to say that
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the most
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important thing to remember here is that
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the advisor has the most right to know
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do accounting and among other things
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they are the only one who can manage the
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chart of accounts reconciliation and tax
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adjustment okay so it's really important
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to keep that in mind so let's be sure
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that I am an advisor and we're gonna
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save and then we're gonna jump back to
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the accounting application alright so
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now we're gonna go ahead and set a lock
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date for the fiscal years let's go to
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accounting lock dates okay so we want to
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be sure that the lock date is the last
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day of the financial year we are closing
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so let's go back to December all right
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we're gonna choose the 31st and we're
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also choosing this lock date for non
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advisors okay this way only users with
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an advisor role can still work in these
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entries so that the accountant can be
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confident that nobody is changing the
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previous year's transactions while
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auditing the books which is quite
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important all right so now let's go
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ahead and save this okay and this is
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where we're gonna start checking things
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off of our checklist and these steps
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vary greatly depending on both your
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localization and your methodology but
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I'm gonna go ahead and go to reporting
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and - my balance sheet okay so here I
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want to be sure that I'm looking at the
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correct date so I want to say as of my
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last as of the end of the last financial
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year however by default it might say as
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of today so we want to be sure we change
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that okay and then if we scroll down
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we're gonna see our unallocated earnings
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here alright which is a hundred and
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twenty five thousand dollars so we want
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to allocate the current year earnings in
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order to have the total current year
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unallocated earnings reporting a balance
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of zero so here we're going to allocate
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all the earning all the current year
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earnings to retained earnings alright so
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let's go ahead and do that by going to
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accounting and creating a journal entry
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all right so let's begin let's go ahead
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and choose a date and the past December
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31st and we're gonna call this 2018
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closing okay we'll keep the journal as
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miscellaneous operations let's go ahead
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and add an account the first count
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account will be our industry
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profits and losses now this account is
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automatically created by odoo to put the
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unallocated year earnings it's only
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condition and let me show you alright
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it's only condition to work well is that
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its type is set as current year earnings
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okay so right here you see type current
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your earnings
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alright so that's important let's go
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ahead and save this under debit we're
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gonna go ahead and put the amount okay
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looks good and we're gonna go ahead and
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add a second line and actually I'm gonna
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create a new account so to do that I
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simply have to create an edit this code
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will be 300 300 all right written name
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is going to be retained earnings alright
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and this is going to be type equity okay
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so since I am creating an equity account
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for this operation and since its type
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equity the normal balance is a credit
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okay so let's go ahead and save this and
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as we can see the credit is applied
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there alright and we're gonna go ahead
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and post this cool now we're gonna go
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back to our reporting section balance
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sheet okay going back to our balance
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sheet and scroll down and we see that
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now it's balanced okay it looks good so
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our current your earnings and current
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your allocated earnings balance each
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other so that there's no unallocated
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earnings remaining so now we see that we
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correctly move the amount in retaining
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earnings and as expected the assets
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equal the liabilities plus the equity so
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we're good to go so now what we're gonna
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do is go back to lock our dates and
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we're gonna walk the date forever for
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all users this time alright
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to to the 31st okay and let's go ahead
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and save this um alright so now nothing
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can be changed so once you're done with
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everything you're good to go
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od generates automatically the reports
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in real time and there's no need to
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generate manually the reports nor to
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worry about the opening of the new
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fiscal year so at the beginning date of
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the fiscal year the account balances
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will be zero
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all right but now what we're gonna do is
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go to reporting the general ledger okay
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I'm gonna go ahead and unfold all and
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then we can generate an excel X X file
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or we can print a preview as well so
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let's go ahead and do that and then
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we'll check it out and there you go we
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have that report easily right here and
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it looks good our total is zero that's
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perfect that's all for this video thank
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you for watching
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