How Account Balances are Carried forward into the Next year

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As we know the balances are carried forward only for Balance Sheet accounts viz. Usage : Balance Sheet / Debtor / Creditor
 
For P&L accounts the balances are zeroed in the new year.
 
For Balance Sheet accounts the balances are carried forward to the new year as follows
 

• For BALANCE FORWARD accounts viz. Cash, Bank, Assets the closing balance of the previous year is transferred as a single entry into the New Year.
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• For OPEN ITEM accounts viz. Debtors, Creditors the closing balance is transferred to the new year along with the break up of the vouchers (Outstanding Invoices and Bills)

These features are controlled by a set of 2 columns (CHARACTERISTICS) defined in the Account Master

• Is Permanent or Temporary
• Is Balance Forward or Open Item

 
Given below is the list of Valid combinations for these characteristics
 

Usage	Is Permanent or Temporary	Is Balance Forward or Open Item
Balance Sheet	Permanent	Balance Forward
Debtor	Permanent	Open Item
Creditor	Permanent	Open Item
Profit and Loss	Temporary	Balance Forward

 
These characteristics are automatically set to the appropriate values when the Account's Usage is setup.
 
 
To ensure that the accounts created reflect the above you may do one of the following.

• Use facility FA03 Maintain Account Master and check all accounts. (But this will be time consuming)
• Use facility FA34 Resolve accounts to be transferred which provides for transferring of Control Account characteristics to sub-accounts
• Use facility F3SL Open Item Control Accounts which allows propagation of characteristics of Control Account to sub-accounts

 
It is important to ensure that these characteristics are set up correctly for Year Closure to Function correctly.