Hello Folks,

The following paragraph I got from oracle material.
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You can post journal entries to a prior accounting period, as well as to a prior fiscal year, as long as the prior period is open,

When you post to a prior period, General ledger automatically updates the beginning balances of all subsequent periods even if the periods is closed.
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My Question is

1. Is it possible close a period randomly?
I.e Current Period is April-2010 Open and Jan-2010 is open and Feb-2010 is closed and March 2010 is open.

2.How come the beginning balances can update for closed period.

Pls explain to me.

Thanks, Raghu.K

The definition of a closed period is that you can NOT post journals to that period.
It doesn't mean that you can't post a journal to a prior period that is open. Of course when you do post to a prior period, the balances get affected, and the changes in the balances get rolled down to subsequent periods, like a domino effect.

Thanks Charlie.
Can you clarify with little more details.

I thought the period should close in sequentially order.
But you state that, Business can close the period at any order.

So what circumstantial make them to keep it open on JAN-2010 and close it on Feb-2010.

Sometimes, accounting requires an adjustment/entry to be made to a closed PRIOR period. It happens sometimes. An entry that should have been made in Jan is not, and MUST be made. This will get the period opened temporarily and once the adjustment/entry is made the period is closed once again.
This call to open the prior closed period is normally made by the accounting group/manager.

It Make sense, Ur Awesome!

Public companies are not allowed to re-open prior closed periods. That is why "Permanently Close" status is there. Auditors keep tight vigilance on public companies. Sometimes private companies go back and enter transactions in past periods. However this is not a good practice. If a company is touching past years then there is something really wrong with that.

CASH ACCOUNT JAN-10 OPENING BALANCE 0 NET ACTIVITY 10
CASH ACCOUNT FEB-10 OPENING BALANCE 10 NET ACTIVITY 0
CASH ACCOUNT MAR-10 OPENING BALANCE 10 NET ACTIVITY 0

If you enter $5 activity against CASH ACCOUNT in JAN-10 then as Charlie said it would produce a dynamo affect for subsequent period's opening balances:

CASH ACCOUNT JAN-10 OPENING BALANCE 0 NET ACTIVITY 10+5
CASH ACCOUNT FEB-10 OPENING BALANCE 10+5 NET ACTIVITY 0
CASH ACCOUNT MAR-10 OPENING BALANCE 10+5 NET ACTIVITY 0

YOU ROCK (as usual)