Once a financial year is complete, Year-End Close (General Journals Management) folds it up: the year's revenue and expense balances are transferred to your flagged retained-earnings account (7.5) as one journal batch, so the Profit & Loss starts the new year at zero and the Balance Sheet carries the accumulated result where it belongs. There is one close per company per year; the close posts into a period that must be open; and like everything else here, it can be undone by reversing its batch.
Until you run it, nothing breaks: the Balance Sheet simply shows retained earnings as the designated account's balance plus the profit of years not yet closed. The application does the arithmetic either way — the close is the tidy, auditable form of it that your accountant will ask for.