Period-end transactions; It is defined as the transactions to prepare the financial statements of the enterprise as of a certain date and to determine the truth and accuracy of the information to be included in these financial statements.

In this article; We wanted to explain the transactions to be made at the end of the period with some examples, with the main headings, in the hope that you, our customers and colleagues, can benefit.

First of all, the preparation and filing of some documents before starting the closing processes, which we will explain in order below, will be helpful for future studies.

We can list these documents as follows;

1. Before starting the above processes and after these processes are completed, checking the detailed trial balance and filing the relevant trial balance
2. 2- After recording the cost and expense reflection accounts, checking the detailed trial balance and filing the relevant trial balance
3. 3- After reflecting and closing the expense and cost accounts by comparing them, checking the detailed trial balance and filing the relevant trial balance
4. 4- After closing 690 hs of 6 accounts, taking detailed trial balance and checking and filing the relevant trial balance

If we take the period-end transactions under the main headings;

1. What to Do in Terms of the Concept of Primacy of Essence
2. Year-end Transactions of Foreign Currency Accounts (Foreign Currency)
3. What to Do in Terms of the Concept of Periodicity
4. Calculation of Depreciation
5. Separation of Provisions: (Due to the Concept of Prudence)
6. Due to One Year Period (Balance Sheet Principles)
7. Calculation of Costs of Sales and Transfer of Expenses
8. Closing Income Statement Accounts

We can explain how.

This part is;

1. Arrangement of General Temporary Balance Sheet
2. Issuing the End of Term Inventory
3. Making Period-End Accounting Transactions
4. Arranging the Final Trial
5. Preparation of Financial Statements
6. Making Closing Records

We can summarize it as:

1. What to Do in Terms of the Concept of Primacy of Essence

• Checks due in the new year must be transferred to notes receivable since they have the nature of promissory notes in essence.
• For the same reason, checks issued with a maturity of the new year must be transferred to the debt securities account.
• Current accounts that have a credit balance in the buyers account (the buyers account is a debit account) must be transferred to the order advances received account.
• If there are companies that have debited balances in the vendors account (they normally have to give credit balances), it must be transferred to the order advances given.
• Year-end Transactions of Foreign Currency Accounts (Foreign Currency)
• 1- Currency vault 31.12 of the relevant General Communiqué of VUK …. The positive difference, which will be evaluated with the exchange rate (effectives rate), is recorded in the foreign exchange income. (These items were made with the thought that the exchange value would increase.)

 ____________ 31.12 .. _____________

100.20 Currency Safe

                                  646.xx Exchange Profits

                                  646,..,…Foreign Exchange Revenues

____________ … /…. _____________

•  Accounts in foreign currency other than cash. 31.12 of the related General Communiqué of TPL. .. positive, positive and negative differences, which are evaluated with the foreign exchange buying rate, should be recorded in the foreign exchange profits or losses accounts. NOTE: For foreign currency checks, promissory notes, advances and receivables, the relevant accounts are debited and the differences are credited to “646-Exchange Profits”. Advances received in foreign currency, foreign exchange differences, if any, are debited to “656- Foreign Exchange Losses” account and credited to the relevant accounts.

               ____________ 31.12 .. _____________

               101.40 Bank X Foreign Exchange Account

                                            646.xx Exchange Profits 646

                                             Currency Revenues

                ____________ …. /….. _____________

•  If the foreign currency receivables are due to exports in the relevant year, 31.12…. Differences arising according to the exchange rate are accounted for by crediting 601 Export Revenue account.
• What to Do in Terms of the Concept of Periodicity

• If there are accounts written for the current year’s expense, although they belong to the new year, they should be investigated and corrected. (Insurance policies for the new year, subscription, etc.)
• Although a direct expense is written, the material that has not been consumed at the end of the year should be researched and taken into stocks. (Example: Consumable auxiliary material)
• If there are accounts that belong to future years and are written as income in the current year, they should be investigated and corrected (such as prepaid rents).
• The document has not yet been received, but all expenses for the current year must be accrued. (Electricity, water, telephone, etc.)
• Calculation of Depreciation
• At the end of the year, depreciation is separated according to the departments they are related to and recorded in accounts 740, 750, 760, 770.
• If the asset to be depreciated is tangible asset, 257. If it is intangible asset, 268. account is used.

                ____________ 31.12 .. _____________

               740. Service Production Cost

               750. R&D Expenses

              760. Sun. Sell. and Mountain. expenses

               770. General Administrative Expenses

               257/268. Accumulated depreciation

                ____________ …. /….. _____________

• Separation of Provisions: (Due to the Concept of Prudence)
• Provision for doubtful trade receivables should be set aside. (Provision for doubtful receivables can be set aside for receivables at the stage of litigation and execution, which cannot be collected even though they are overdue in the relevant period, and receivables that cannot be collected even though they are requested once with pleasure, and are too small to be worth filing a lawsuit (if the cost of litigation is more than the receivable, it is too small to be worth filing a lawsuit.). No provision can be made for secured receivables.
• If there is a decrease in value in the inventories relative to the market or due to deterioration, etc., the inventory impairments should be separated. According to the decision of the Appraisal Commission for the stock depreciation, if there is no decision of the Valuation Commission, KKEG should be recorded in the period expenses.
• Rediscount Transactions: Based on the principle of seeing assets with their real savings values, forward bills should be rediscounted.
• Due to One Year Period (Balance Sheet Principles)

• Assets with a duration of 1 year or less on 31.12. must be transferred to current assets, if any, among non-current assets.
• Assets with a duration of more than 1 year on 31.12. must be transferred to current assets, if any.
• On 31.12.
• Resources longer than 1 year on 31.12. must be transferred to long-term liabilities, if any, among short-term liabilities.
• Calculation of Costs of Sales and Transfer of Expenses

• Within the framework of Article 186 of the Tax Procedure Law, inventory should be drawn up as of 31.12.2017 and these should be evaluated in line with the rules stipulated in the relevant articles of the Law.
• The amount of 5 per thousand of the export revenue (FOB); It can be deducted from corporate earnings as a lump-sum expense.

This Part Summarizes;

1. Calculation of cost of goods sold
2. Calculating the Cost of Merchandise Sold
3. Calculation of Cost of Services Sold
4. Transfer of Expenses

After these items, all 700 accounts will be closed.

• Closing Income Statement Accounts

• Debits to revenue, income and profit accounts (accounts starting with 60. 64. 67) are credited to 690 accounts and the revenues are transferred to the receivable (profit) of 690 Period Profit-Loss account.
• Accounts of costs, expenses and losses (accounts starting with 61-62-63-65-66-68) are credited and debited to 690 account, and expenses are transferred to debit (loss) of 690 Period Profit-Loss account.
• 691 Period Profit, Tax and Other Legal Liabilities Provisions account must be transferred to the balance sheet account with the same name and code no. 370.
• 193 accounts need to be rolled over to 371 accounts. (If 193 is greater than 691, only 691 will be rolled over.)
• Profit for the period (690 accounts) must be closed
• 692 accounts (Net Profit or Loss for the Period) need to be rolled over to 590 accounts.
• If there is a loss in 690 accounts, it will be transferred to 692 accounts.
• 692 accounts need to be rolled over to 591 accounts.

After the relevant studies are done, the registrations for the new year should be opened. You are welcome to our office to get detailed information on the subject.

resourceshttps://www.ismmmo.org.trhttps://www.hmb.gov.trhttps://www.gib.gov.tr

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