What Are Opening Entries

These Entries are made at the Beginning of the Accounting Period when the business has just started or when the business starts new Accounting Period, then it is related with the Ending / Closing Balances of Different Kinds / Types of Accounts in the Previous Accounting Period.. Every business in accounting starts with Opening Entries whether it is First Accounting Period or a New Accounting Period.

All the Financial Statements such as Income Statement, Balance Sheet, Statement of Cash Flows, Statement of Changes In Equity And Statement of Retained Earnings are opened in the new Accounting Period with the previous Accounting Period’s Balances. In fact, the Ending Balances of Assets, Liabilities And Owner’s Equity are Opened in their respective Ledgers in the new Accounting period.

So, at the beginning of Accounting Period, Accounts are also Opened with Opening Balances Brought Down from previous Accounting Period Ending Balances.