Identify the key steps in the closing process that provide the most opportunity to make mistakes in processing account transactions. Give 2 rec.of improving the accuracy and reliability of the information in the gaps that you have identified.
Transferring information from temporary accounts to permanent
accounts are referred to as closing accounting process or closing books. After
recording financial transaction all accounting staff needs to close
down financial process for the month to prepare monthly accounts. Every
business uses temporary accounts, revenues and expense accounts which
allows the company or business to record all activities carried in those
month. The purpose of closing process is to close out those accounts
and get the balances, allowing them to start with a zero balance in the
next month. Generally it consists of four steps:- 1-closing revenues 2-closing expenses 3-closing income summary 4-closing dividends
For accuracy and reliability of information we should follow the detailed 10 steps of accounting cycle:-
1-Collect source document 2-Analyze transaction 3-Journalize transactions 4-Post transactions in the ledger 5-Prepare un adjusted trial balance 6-Prepare adjusting entries 7-Prepare trial balance 8-Prepare financial statements 9-Journalize post closing entries 10-Re-draft financial statements
Hope this was helpful. Please select my answer as the best if it was. Thanks! :)
Feb 1st, 2015
Did you know? You can earn $20 for every friend you invite to Studypool!