What steps are recommended to prepare data for year-end adjustments and closing in QuickBooks Online?

• A. Reconcile all accounts, review AR aging, verify revenue totals, run year-end reports, and lock the period if applicable.
• B. Reconcile all accounts, review AR aging, verify revenue and expense totals, run year-end reports, and lock the period if applicable.
• C. Review customer balances, verify payroll totals, and back up data.
• D. Export all data to CSV, create a new company file, and adjust opening balances.

Answer: (B)

Before year-end adjustments and closing in QuickBooks Online, the focus is on making sure the financial data is accurate, complete, and protected from further changes. Start with reconciling all accounts so bank, credit card, and other balances match external statements, and any discrepancies are cleared. Next, review the accounts receivable aging to confirm customer balances are correct and that outstanding or overdue amounts are properly documented, which helps reflect true revenue realization. Then verify revenue and expense totals to ensure income and costs are posted to the correct periods, giving you an accurate year-to-date picture. Run year-end reports to review the overall figures, spot misclassifications, and confirm consistency across the year. Finally, lock the period if applicable by setting a closing date to prevent edits after you finalize the year.

Other practices like backing up data or exporting to CSV, or creating a new company file, aren’t part of the standard year-end close in QuickBooks Online, and simply reviewing customer balances or payroll totals alone doesn’t provide the complete preparation needed for year-end adjustments.