Corporate Income Tax Returns
the financial statements have been prepared, the
corporate income tax returns need to be prepared for
all levels of government that require them.
accountant will take the income figures from the
financial statements he or she has just prepared and
will adjust them for any necessary differences
between book and tax. For example, a portion of the
meals and entertainment expense must be added back
into income for tax purposes, as it is not 100
the balances for income taxes owing are calculated,
the accountant must make an entry in the financial
statements to accrue this liability. Then, both the
financials and the tax returns are finalized and
presented to you for signing.
Rolling Forward the Year
The process of close off and roll forward simply clears out your income
statement accounts so that you can start fresh for
the new year. Your balance sheet accounts carry
forward, but the income and expense accounts roll up
into retained earnings.
you are on a manual system, your closing entry will
debit your revenue accounts and credit your expense
accounts to bring them to zero. The difference is
debited or credited (as the case may be) to retained
you are on a computerized system, there will be a
close-off procedure to perform as well. It's very
important, however, to save a backup copy of the
final figures from the prior year. Keep this backup
separate from your daily backups so that you know
that it is the final one. Once you have done that, and you have read the system
documentation for the roll-forward procedure, you
can perform that task.
you are ready to start your new year!