Question

This chapter covers closing the books and the accounting cycle. Assume you were recently hired to be a bookkeeper of a small business. You find that the company had never completed an accounting cycle or closed the books and there were no records of any procedures about month end processes. How would go about your first month end to ensure accurate financial statements? Be specific in the steps you would take using QBO and any other factors. Use complete sentences, be respectful, and post one original thought by Thursday and then post off three of your peers’ discussions.

Answer 1

1. As the company never had done any accounting, there is a huge responsibility for the bookkeeper to do his task. As a bookkeeper of such a company I would first understand the business process, their sourcing of materials to selling if materials.

Then in the i would go by checking whether the business is having a bank account if not then i'll open a bank account. Then I would make a list of debtors and creditors, or all the cash and credit transactions. I make a list of employees and their employment conditions (salaries,wages, holidays etc). Depending upon the requirement I'll select a proper online accounting tool for the company.

2. The steps I'll take up to conpkeco the accounting cycle for the company are

a.Recording the transactions according to their category and financial year. The transactions include all cash and non cash transactions.

b. From segregating the transactions I'll move onto the next step of jounalising the transactions. I'll make proper journal entry for the transactions.

c. From the jour entry I'll post them into their proper general ledgers. I'll give me a summary for the business's accounts.

d. At the end of the each accounting period I'll prepare a trial balance. I'll help me to check for discrepancies in jounalising the transactions.

e. If the trail balance is not tallying at the end of period we need to check where we went wrong, and make proper adjustments in the journal entries.

f. Once the trial balance is properly fine the next involves preparation of Financial statement. We will then prepare the income and expenses statement and also the balance sheets periodically .

I'll start the next period Accounting will taking the closing balances of one year as opening balance.

Thank you,