Journals and Period Close
Journals and Period Close
This domain tests the journal lifecycle from entry to posting, reversal and recurring journals, and the order of period-close tasks.
Journal lifecycle
A journal has a header and lines. It can be entered manually or imported from a subledger. Validation checks required fields, balanced lines, and open periods. If journal approval is enabled, the journal must be approved before posting. Posting is a separate step; only posted journals affect balances. Statuses include Unposted, Posted, and Error. Journals are grouped in batches, and a batch can be posted as a unit.
Reversals and recurring journals
A reversal creates an opposite entry in a chosen period. Define the reversal method: Switch DR/CR swaps debit and credit; Change Sign negates the amount. Choose the reversal period: same period, next period, or a specific period. The reversal date must fall in an open or future-entry period. Recurring journals are templates that generate entries each period, with fixed or variable amounts.
Period close
Close subledgers first so all accounting is transferred. Run Journal Import and correct errors. Post all journals. Run revaluation and translation if required, then consolidation. Reconcile balances, review the close status, and close the period. Period statuses are Never Opened, Future Entry, Open, Closed, and Permanently Closed. A permanently closed period cannot be reopened.
Worked example
An accountant posts a March journal that belongs in April. Reverse it in March with the reversal period set to April. Reasoning: the original entry remains in March, and the reversing entry dated in April offsets it there. Across the two periods the net effect is zero, and you cannot delete a posted journal.
Traps
Do not assume posting is automatic. Do not delete a posted journal to reverse it. Do not close a period before subledger accounting is fully transferred. Do not confuse Closed with Permanently Closed.