How to Prepare Closing Entries

Save
Next Video:
Understanding Bank Financial Statements....5

Preparing closing entries requires closing out an accounting period with a list of recurring finance information, such as accrual for salaries, fixed assets, depreciation and amortization. Keep a list of recurring closing entries for each quarter with advice from a certified public accountant in this free video on accounting.

Part of the Video Series: Finance & Accounting Facts
Promoted By Zergnet

Comments

Video Transcript

My name is Miranda Chook, a CPA. Closing entries and adjusting journal entries are sometimes used interchangeably. These entries are typically made to close out an accounting period therefore, the term closing entries. A best practice which is also Surbanes-Oxley Compliant is to have a list of recurring closing entries available. This way the work is eliminated because you have the list of entries that you want to consider to be made, you have already validated the correct account numbers and you have also identified the source of the information and/or the calculation that needs to be done to prepare the entry. Some common closing entries or adjusting journal entries include an accrual for salaries between the period that salaries were last paid to the period end. There are also typical closing entries such as fixed assets, depreciation and amortization. There are also some closing entries that may only be made at quarter end. These would include an evaluation of the allowance for doubtful accounts and a truip of the tax accounts and finally there are year end specific closing entries and the main one here would be the closing out of income and expense accounts for the year.

Featured

Related Searches

M
Is DIY in your DNA? Become part of our maker community.
Submit Your Work!