Closing the books refers to the steps required for financial statement preparation. There are steps that should be followed to ensure journal entries are posted correctly. When journal entries are posted improperly and general ledger balances are inaccurate, there is pervasive business risk involved due to the resulting misstated financial statements.
This close the books sample process flow focuses on the following activities:
- Journal entry preparation and posting
- General ledger account reconciliation
- Financial statement preparation and delivery
This document can be used as a general guide to understand and review the close the books processes. Organizations should continuously update and monitor the processes included in this document to ensure that it reflects business operations.