About account 891 and account 892

How do the accounts 891 – ”opening balance” – and 892 – „closing balance” work and why are they useful?

  • The use of such accounts is based on the evolution of accounting software, starting from the opening balance principle. According to this accounting principle, the balance sheet as at December 31st has to be identical to the opening balance of the following business period.
  • This fundamental principle is applicable in Romania as well, by companies that use bookkeeping rules according to the Accounting Ordinance of the Finance Ministry no. 1802/2014, valid as of January 1st, 2015.
  • These accounts are used from a technical point of view in order to close the previous financial period and to open the following financial period.
  • Accounts are to be used as follows:

Account 891 – ”Opening balance”

By this account, the opening of all accounts is ensured. Balances of liability accounts are booked (by their crediting) on the debit side of the account 891 – „opening balance” and on the credit side there are booked balances of asset accounts (by their debiting). After such entries, the account is balanced.”

Account 892 – ”Closing balance”

By this account, the closing of all accounts is ensured. Balances of asset accounts are booked (by their crediting) on the debit side of the account 892 – “closing balance” and on the credit side, there are booked balances of liability accounts (by their debiting). After such entries, the account is balanced.”

  • Examples of accounting entries for a company having the following status at the end of the financial period:
Assets Liabilities
Customers                              RON 100 Paid in share capital                RON 200
Bank accounts in RON          RON 800 Suppliers                                    RON 700
Total assets                            RON 900 Total liabilities                          RON 900

 

  • The following accounting entries are due as at December 31st:

 

  • 892 „Closing balance”= 4111 „Customers” amounting to RON 100
  • 892 „Closing balance”= 5121 „Bank accounts in RON” amounting to RON 800
  • 1012 „Subscribed and paid in share capital”=892 „Closing balance” amounting to RON 200
  • 401 „Suppliers” = 892 „Closing balance” amounting to RON 700
  • The following accounting entries are due at the beginning of the following financial period:
  • 4111 ”Clients”= 891 „Opening balance”, amounting to RON 100
  • 5121 ”Bank accounts in RON”= 891 „Opening balance”, amounting to RON 800
  • 891 „Opening balance”= 1012 „Subscribed and paid in share capital” amounting to RON 200
  • 891 „Opening balance”= 401 „Suppliers” amounting to RON 700

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