13th Month Process

[ClasinaS]

am looking into year end transactions, such as Audit Adjustments. My understanding is that these transaction are typically transacted against the 13th period.

In the help files I found that the transactions type ‘Audit Adjustment’ will be use. In the JWB, adjustments will be posted against the 13th Month Adjustments . Will the latter replace the ‘Audit Adjustment’ transaction type?

• Should the 13th Month Adjustments only be used for adjustments at the end of the fiscal year.

  • Reason for asking: I am able to post using adjustments in any open month, with the Journal Source 13th Month Adjustments

• To create open balances for the next financial year, the Create Year End Close Entry should be executed. This is probably executed when the financial year is completed, but no tax prep yet.

  • Audit adjustment entries are typically added after the tax return is completed (months after the original closing entries were created)

  • It seems that after the audit adjustments have been entered the next actions for the previous year closing:

    • 1st closing entry transaction should be voided, and then rerun Create Year End Close Entry .

    • Is this the correct process to included the adjustments in the open balances for the next financial year?

[teresa.l]

@ClasinaS

• Should the 13th Month Adjustments only be used for adjustments at the end of the fiscal year.
• Reason for asking: I am able to post using adjustments in any open month, with the Journal Source 13th Month Adjustments
• To create open balances for the next financial year, the Create Year End Close Entry should be executed. This is probably executed when the financial year is completed, but no tax prep yet.
• Audit adjustment entries are typically added after the tax return is completed (months after the original closing entries were created)
• It seems that after the audit adjustments have been entered the next actions for the previous year closing:
  • 1st closing entry transaction should be voided, and then rerun Create Year End Close Entry .
  • Is this the correct process to included the adjustments in the open balances for the next financial year?

You are correct that period 13 is for audit adjustments because period 12 has been closed, as you state, for weeks or months. Technically, you could open and post the audit adjustments in any period but posting these adjustments in period 13 separates them from routine period end activity. The year end close process should be re-run to ensure beginning year balances and retained earnings are correct.