Table of Contents

Chapter 1 - The Year-End Close. 1

The Calendar and Fiscal Years. 1

The Year-End Work Load. 2

The Year-End Calendar. 2

Staffing Issues. 2

General Accounting Closing Activities. 3

Annual Performance Reviews. 3

Destroy Documents. 3

Create New Files. 4

Transfer Documents to Long-Term Storage. 4

Review Journal Entries. 5

Annual Budget 5

Reconcile Accounts. 8

Update the Chart of Accounts. 9

The Year-End Book. 10

Soft Close. 11

Chapter 2 – Receivables Year-End. 13

Verify the Allowance for Doubtful Accounts. 13

Clean the Receivables Aging Report 14

Match the Receivables Aging to the General Ledger. 14

Chapter 3 – Inventory Year-End. 17

The Physical Inventory Count 17

Verify Inventory Valuation. 18

Verify Open Jobs. 18

Examine Cost Pools. 19

Examine Obsolete Inventory Reserve. 19

Examine for Lower of Cost or Market 19

Review Outstanding Bill and Hold Transactions. 21

Chapter 4 – Fixed Assets Year-End. 23

Calculate Year-end Depreciation. 23

Document Interest Capitalization. 23

Verify Asset Retirement Obligations. 24

Investigate Asset Impairment 24

Verify Held-for-Sale Assets. 25

Investigate Repairs and Maintenance. 25

Derecognize Fixed Assets. 25

Conduct a Fixed Asset Physical Count 26

Verify the Fixed Asset Register. 26

Complete a Fixed Asset Roll Forward. 26

Chapter 5 - Payables Year-End. 29

Uncashed Checks. 29

Unremitted Expense Reports. 29

Delay the Supplier Invoice Cutoff 29

Record Within the Correct Period. 30

Settle Disputed Invoices. 30

Clean Up Prepaid Expenses. 30

Match Payables Aging to General Ledger. 31

The Form 1099-MISC.. 31

Treatment of Incorrect Filings. 33

Form 1099 Administrative Issues. 34

Chapter 6 – Payroll Year-End. 38

Human Resources Inputs. 38

Bonus Finalization. 39

Commission Finalization. 39

Update the Experience Rating. 39

Update the Mileage Reimbursement Rate. 39

Payroll-Related Tax Filings. 39

Form W-2. 39

Form 940. 41

Form 945. 44

Chapter 7 – Public Company Year-End. 47

The Public Company Closing Process. 47

The Form 10-K.. 48

Public Company Record Keeping. 51

Additional Staffing. 51

Chapter 8 – The Closing Checklist 53

Closing Checklist 53

Answers to Chapter Questions. 59

Glossary. 67

Index. 69

 

Final Examination.......................................................................................................................................................71