The financial year-end closing entries involve a set of accounting procedures and journal entries aimed at preparing accurate final financial statements . This process ensures that all financial transactions have been properly recorded, and that the financial statements reflect the company's true financial position. Below are the key steps and the necessaryAccounting Entry for closing the financial year:

 Key Steps for Closing the Financial Year

1- Accrual Adjustments:

• Record all accrued expenses and revenues that were not accounted for during the financial year.
• Adjust accounts receivable and payable.

2- Inventory Count:

• Perform a physical count of inventory at the year-end and compare it with the book inventory. Record any discrepancies.

3- Provisioning:

• Create necessary provisions, such as for doubtful debts and depreciation.

Closing Entries:

• Transfer the balances of temporary accounts (revenues and expenses) to the income summary.
• Transfer net profit or loss to retained earnings or capital account.

 Accounting Entries for Closing the Financial Year

1- Accrual Adjustments for Revenues and Expenses:

• Example 1: Record accrued revenues from the accrued revenue account to the revenue account.
• Example 2: Record accrued expenses from the expense account to the accrued expenses account.

2- Inventory Adjustments:

• Example: Record discrepancies in inventory from the cost of goods sold account to the inventory account.

3- Provisions:

•   Example: Create a provision for doubtful debts from the doubtful debts expense account to the doubtful debts provision account.

4- Closing Entries:

• Example 1: Close the revenue account by transferring its balance to the income summary account.
• Example 2: Close the expense account by transferring its balance to the income summary account.
• Example 3: Transfer net profit to retained earnings from the income summary account to the retained earnings account.

In conclusion, these accounting procedures and closing entries help companies prepare accurate financial reports that reflect their true financial performance, ensuring compliance with recognized accounting standards. For instance, government accounting entries for receipts follow specific standards.