Closing Activities

1. GR/IR Clearing Account Analysis ensuring that the balance is zero (goods delivered, not
invoiced/goods invoiced, not delivered: RFWERE00).

2. Material Stocks are usually valuated at year end. Any changes in price of the material vs market price is posted. (LIFO FICO rules are used). Inhouse materials via product costing, purchased materials via price difference) DB: Value adjustment expense CR: Stock Value adjustment: 3. Balance confirmations: Reports SAPF130D and SAPF130K create correspondence to
and from your customers and vendors to enable you to check the balance of receivables and payables. 4. Forigen currency valuation: You carry out the foreign currency valuation before you create the financial statements a) Foreign currency balance sheet accounts, that is, G/L accounts that you run in foreign currency (the balances of the G/L accounts in foreign currency are valuated) b) Open items (customers, vendors, G/L accounts) posted in foreign currency (the line items are valuated)

5. Regrouping of receivable and payables: (???) learn more..ALSO what are transfer postings. a) credit memos from customer b) vendor is also customer c) any change in recon accounts d) 6. ACCRUAL and DIFFERAL postings: 7. Reconciliation ledger 8. Adjustment postings for TAX, profit centers etc etc

Balance sheet format:

P&L Format

P&L Statement has two methods. ( Cost of sales accounting or period accounting) Cost of sales accounting
The emphasis with this method is on matching the revenues for goods and/or services provided (sales revenue) against the related expenses for those items (cost of goods sold). Therefore, this accounting method displays revenues and expenses in a manner optimized for conducting profit margin analyses, and as such it is ideal for the sales, marketing, and product management areas. Cost of sales accounting requires the use of organizational units called functional areas to divide costs posted to the same expense account to separate report items. As illustrated above, this allows you to present the same type of expense in different sections of your financial statements (for example, personnel expenses associated with production are included in Gross results while personnel costs incurred for other purposes would be included in the Cost of goods sold section). By grouping expenses by function (production, sales, administration), cost of sales accounting also defines the business transaction that each individual expense in the company results from.

Period accounting
The emphasis here is on summarizing the total output of a period and the total costs of this period,

grouped by expense type. Therefore, this accounting method presents the revenues and expenses of a specific period and the changes in stock, work in process, and capitalized activities. As such, it is ideal for the production and profit center areas.