Closing has several different meanings in the business world. One is in accounting, one is in real estate, and one in sales.
In accounting, closing is also known as closing the accounts or closing the books. It is done to zero out the balances of accounts so that they only reflect transactions within the given accounting period. Accounting periods typically end as the calendar year ends.
Closing entails transferring nominal or temporary accounts to summary and/or capital accounts. Specifically it means transferring the following:
*Credit balances in the revenue account to the income summary account.
*Debit balances in the expense account to the income summary account.
*The balance of the income summary to the owner’s capital account (debited for net income and credited for net loss).
*The debit balance of the withdrawals account to the capital account.
In more general terms, closing can refer to any individual or entity withdrawing all the money deposited into the account and informing the bank of the intention to close the account.
A closing is the transfer of property that settles a real estate deal. On the closing date, the buyer and seller consummate the contract by transferring the deed, payment for the property, keys, and local government registration for the property. After closing, a real estate deal is officially done.
When a salesperson closes a sale, she officially completes it by obtaining payment, a contract, or other final affirmation. A “closed” sale is a successful or completed sale. To close someone is to successfully sell them something.