Month End Closing

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Month end closing is a critical process for every business. It is the time when companies reconcile their financial records and prepare financial statements. This process is essential for businesses to have an accurate picture of their financial health and to make informed decisions for the future. To start, all transactions made during the month are reviewed and recorded in the general ledger. This includes revenue and expenses, and any adjustments that need to be made. Once all transactions have been recorded, a trial balance is created to ensure that all debits and credits are equal. Next, financial statements are prepared, including the income statement, balance sheet, and statement of cash flows. These statements provide insight into the company's financial performance, including revenue and expenses, assets and liabilities, and cash flow. Once the financial statements are prepared, they are reviewed by management and any necessary adjustments are made. This process ensures that the financial statements accurately reflect the company's financial position. Finally, the month end closing process ends with the preparation of various reports, such as the accounts payable and accounts receivable reports. These reports give the company an overview of the money owed to them and the money they owe to others. In summary, the month end closing process is essential for businesses to maintain accurate financial records, prepare financial statements, and make informed decisions for the future. By ensuring that all transactions are recorded correctly and financial statements are accurate, businesses can have a clear picture of their financial health and plan accordingly.

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