Reviewing a checklist for closing your books
As discussed, there are several steps you will need to take in order to close your books for the financial period. How often you close your books (for example, monthly, quarterly, or annually) will determine how often you need to complete these steps. Remember the importance of closing your books, as this will ensure that all transactions for the financial period have been recorded and that your financial statements are accurate, which is important because your accountant will use them to file your business tax return.
The following is a checklist of the steps you need to complete in order to close your books. You should complete them in the order presented:
- Reconciling all bank and credit card accounts
- Making year-end accrual adjustments
- Reviewing new fixed asset purchases and adding them to the chart of accounts
- Making depreciation journal entries
- Taking a physical inventory and recording inventory...
