Final answer:
During the end of year close out in accounting, the company does not close or terminate its operations. Instead, it involves activities such as reconciling accounts, adjusting entries, preparing financial statements, and analyzing financial performance.
Step-by-step explanation:
During the end of year close out in accounting, several important activities take place. However, one thing that does not occur during this process is the actual closing of the company or the termination of its operations.
Instead, the end of year close out in accounting involves activities such as reconciling accounts, adjusting entries, preparing financial statements, and analyzing financial performance. It is a crucial step in the accounting cycle to ensure accurate and reliable financial reporting.
For example, during the close out, the accountant may review the general ledger, make necessary adjustments for accrued expenses or prepaid items, and generate an income statement, balance sheet, and cash flow statement.