Table of contents

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1. Introduction to Accounting1h 21m
2. Transaction Analysis1h 13m
3. Accrual Accounting Concepts2h 38m
4. Merchandising Operations2h 30m
5. Inventory1h 55m
6. Internal Controls and Reporting Cash1h 16m
7. Receivables and Investments3h 8m
8. Long Lived Assets5h 1m
9. Current Liabilities2h 19m
10. Time Value of Money1h 23m
- Time Value of Money Equations
  35m
- Using Time Value of Money Tables
  47m
11. Long Term Liabilities2h 45m
12. Stockholders' Equity2h 15m
13. Statement of Cash Flows2h 24m
14. Financial Statement Analysis5h 25m
15. GAAP vs IFRS56m

3. Accrual Accounting Concepts

Closing Entries

Financial Accounting

3. Accrual Accounting Concepts

Closing Entries

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Multiple Choice

Which of the following steps should you complete before closing a client's books? Select the correct option.

Record closing entries, distribute dividends, and prepare the cash flow statement

Prepare the post-closing trial balance, issue financial statements, and open new accounts for the next period

Reconcile all bank accounts, review adjusting journal entries, and verify all revenues and expenses are recorded

Reverse accruals, depreciate fixed assets, and close the income summary account

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Verified step by step guidance

Understand the purpose of closing a client's books, which is to finalize the accounting records for a specific period and prepare them for the next period.

Reconcile all bank accounts to ensure that the balances in the accounting records match the balances on the bank statements. This step helps identify any discrepancies or errors.

Review adjusting journal entries to confirm that all necessary adjustments, such as accruals and deferrals, have been made to accurately reflect the financial position and performance of the client.

Verify that all revenues and expenses are recorded in the correct period. This ensures compliance with the matching principle and accurate financial reporting.

Ensure that the income summary account is closed, and all temporary accounts (e.g., revenue, expense, and dividend accounts) are reset to zero for the next accounting period.