How they work and what they are needed for the accounts 891 – “Opening Balance Sheet” – and 892 – “Closing Balance Sheet” 891 ”?
- The use of these accounts takes into account the evolution of accounting software, starting from the principle of intangibility of the opening balance sheet. In accordance with this accounting principle, the balance sheet at 31 December of the year ended must be identical to the opening balance sheet for the following year.
- This fundamental principle can also be used in Romania by companies that apply accounting in accordance with Ordinance of the Finance Ministry (OMFP) no. 1802/2014 on accounting, in force since January 1, 2015.
- These accounts are used, technically seen, to close the previous financial year and to open the next financial year.
The operation of the accounts is as follows:
Account 891 ”Opening balance sheet”
This account ensures that all accounts are opened. In the account debit 891 – „Opening balance” – the balances of the liability accounts are registered (through their crediting), and in credit, asset account balances (by debiting them). After making these entries, the account is settled.”
Account 892 ”Closing balance sheet”
This account ensures that all accounts are closed. In the account debit 892 – ”Closing balance sheet” – the balances of the asset accounts are registered (through their crediting), and in credit, liabilities account balances (by debiting them). After making these entries, the account is settled.”
Example of accounting registrations with a company that presents the following situation at the end of the financial year
Active | Passive |
Clients 100 lei | Subscribed and paid in capital 200 lei |
Bank in lei 800 lei | Providers 700 lei |
Total active 900 lei | Total Passive 900 lei |
On December 31, the following accounting entries are made:
- 892 „Closing balance sheet”= 4111 „Clients” with the amount of 100 lei
- 892 „Closing balance sheet”= 5121 „ Bank accounts in lei” with the amount of 800 lei
- 1012 „ Subscribed and paid-in share capital”=892 „Closing balance sheet” with the amount of 200 lei
- 401 „ Providers” = 892 „Closing balance sheet” with the amount of 700 lei
The accounting entries are made at the beginning of the following financial year:
- 4111 ”Clients”= 891 „Opening balance” with the amount of 100 lei
- 5121 ”Bank accounts in lei”= 891 „Opening balance” with the amount of 800 lei
- 891 „Opening balance”= 1012 „ Subscribed and paid-in share capital” with the amount of 200 lei
- 891 „Opening balance”= 401 „Providers” with the amount of 700 lei