When you create chart of accounts, there is an option of selecting cost element creation. If you select the option of manual creation the cost elements are created manually. If the other option get selected then related cost elements are automatically get created at the moment you save the general ledger master data.
With this setting of cost elements and General ledger master data, when you do any posting in FI, the data automatically flow from FI to controlling module with the help of a cost object.
In Profit Center Accounting settings are done in 3Kei and 3keh. The balance sheet items move from FI Module to CO. By running some carry forward transactions in PCA the balance sheet and profit and loss accounts are created at the profit center level.