There are no prerequisites.

Course Description

One of the most difficult tasks for the practicing accountant is to close the books at the end of each month and produce a quality set of financial statements in a timely manner. From the perspective of the rest of the company, it may be considered the most important accounting function of all. This course walks you through every aspect of closing the books, including specific closing activities, how to construct the financial statement package, the controls and record keeping systems needed to close the books, and how to fine-tune the process.


Steven M. Bragg, CPA

Steven M. Bragg, CPA, is a full-time book and course author who has written more than 70 business books. He provides Western CPE with self-study courses in the areas of accounting and finance, with an emphasis on the practical application of accounting standards and management techniques. A sampling of his courses include the The New Controller Guidebook, The GAAP Guidebook, Accountants’ Guidebook, and Closing the Books: An Accountant’s Guide. He also manages the Accounting Best Practices podcast.

Steven has been the CFO or controller of both public and private companies and has been a consulting manager with Ernst & Young and an auditor with Deloitte & Touche. He holds an MBA from Babson College, a Master of Finance from Bentley College, and a BA from the University of Maine (summa cum laude).

Course Specifics

Sep 26, 2019
There are no prerequisites.

Compliance Information

Qualifies for CA Fraud: No

Learning Objectives

Upon successful completion of this course, participants will be able to:

Chapter 1

  • Cite an example of a common subsidiary ledger
  • Identify what is recorded in the purchase ledger

Chapter 2

  • Identify the purpose of an adjusted trial balance or extended trial balance
  • Specify where line items in a trial balance originate

Chapter 3

  • State the offset account of accrued revenue
  • List the purpose of a reversing entry and income summary account
  • Identify why accountants are assigned to make journal entries

Chapter 4

  • Identify a key issue when consolidating results from divisions
  • Cite the importance of closing subsidiary ledgers

Chapter 5

  • List an advantage of performing an early bank reconciliation
  • Specify the purpose of workflow management systems

Chapter 6

  • Define not sufficient funds and lifting fee
  • Identify how the closing of petty cash affects the overall close

Chapter 7

  • Cite when it is not necessary to record revenue
  • List an inefficient way for handling rebillable expenses

Chapter 8

  • Identify a way to improve inventory record accuracy
  • Define the first in, first out method
  • Cite the basis for the retail inventory method
  • Specify when overhead may be overabsorbed

Chapter 9

  • Cite when interest should be capitalized
  • Define carrying amount
  • State what should be done when an asset group is impaired

Chapter 10

  • Define negative approval
  • Cite an example of a situation where accounts payable would suspend payment
  • Identify an advantage of accruing an expense based on the purchase order

Chapter 11

  • Specify where a commission expense may be classified
  • Identify an item for which payroll tax accrual is inappropriate
  • Cite how an employee pay raise affects vacation accrual

Chapter 12

  • Name a type of income statement that has multiple subtotals
  • Identify the purpose of the contribution margin income statement
  • Cite a good source document for use when compiling by hand

Chapter 13

  • Identify how specific items should be classified on a balance sheet
  • List steps used to construct a balance sheet

Chapter 14

  • Identify an item included in the investing activities section of a statement of cash flows
  • Specify where an increase in trade receivables would be accounted for

Chapter 15

  • List an item that could be separately identified on the statement of retained earnings

Chapter 16

  • List what should be included when disclosing bad debts, contingencies and commitments, fixed assets, or revenue issues

Chapter 17

  • Define segment test and identify how to proceed when cutoffs are not met
  • Cite procedure for reporting segment information

Chapter 18

  • Identify assumptions and applications of the integral view
  • State effects of the discrete view on interim reporting
  • Specify when a change in accounting estimate occurs

Chapter 19

  • Cite when adjustments should be made to basic earnings per share
  • Specify when to subtract interest expense from and items that may reduce diluted earnings per share

Chapter 20

  • List a possible consequence of third-party Form 10-Q preparation
  • Name a document that may only be issued with board of directors' approval
  • Cite a step in the EDGARizing process

Chapter 21

  • Identify when an analytical review is helpful

Chapter 22

  • List items to be included in the month-end binder
  • Identify what should be part of recordkeeping for public companies

Chapter 23

  • Identify good recipients for soft close financial statements
  • Cite the date when calendar-year companies would use a soft close
  • List situations when a soft close may produce financial statement errors
  • Define a virtual close and specify how it differs from a soft close

Table of Contents

Chapter 1 – The General Ledger and Other Ledgers

Learning Objectives


The Ledger Concept

General Ledger Overview

The Accounts Receivable Ledger

The Purchase Ledger


Chapter 1 Review Questions

Chapter 2 – The Trial Balance

Learning Objectives


Overview of the Trial Balance

The Trial Balance Format

The Extended Trial Balance

Trial Balance Error Correction

The Post-Closing Trial Balance

Evaluation of the Trial Balance


Chapter 2 Review Questions

Chapter 3 – Journal Entries

Learning Objectives


The Accruals Concept

Adjusting Entries

Reversing Entries

Common Adjusting Entries


Allowance for Doubtful Accounts

Accrued Revenue

Accrued Expenses

Prepaid Assets

Closing Entries

Correcting Entries

Journal Entry Efficiencies

Immaterial Journal Entries

Reversing Entries

Journal Entry Templates

Recurring Journal Entries

Standard Journal Entry Checklist

Journal Entry Responsibility

Avoid Journal Entries Entirely

Standardize Accounts


Chapter 3 Review Questions

Chapter 4 – The Closing Process

Learning Objectives


Prior Steps: Update Reserves

Core Steps: Issue Customer Invoices

Core Steps: Value Inventory

Core Steps: Calculate Depreciation

Core Steps: Accrue Expenses

Core Steps: Consolidate Division Results

Core Steps: Eliminate Intercompany Transactions

Core Steps: Review Journal Entries

Core Steps: Reconcile Accounts

Core Steps: Close Subsidiary Ledgers

Core Steps: Create Financial Statements

Core Steps: Review Financial Statements

Core Steps: Accrue Tax Liabilities

Core Steps: Close the Month

Core Steps: Calculate Earnings per Share

Core Steps: Add Disclosures

Core Steps: Write Cover Letter

Core Steps: Issue Financial Statements

Delayed Steps: Issue Customer Invoices

Delayed Steps: Closing Metrics

Delayed Steps: Document Future Closing Changes

Delayed Steps: Update Closing Procedures

Case Study

Closing Checklist

Customer Billings

Accounts Payable

Fixed Assets


Journal Entries

Balance Sheet Reconciliations

Consolidate Results

Error Checking

Preparation of the Financial Statements – Private Company

Preparation of the Financial Statements – Public Company

Final Tasks – Month-End

Final Tasks – Year-End


Chapter 4 Review Questions

Chapter 5 – Fine-Tune the Closing Process

Learning Objectives


Task Interdependency Analysis

Correct Errors Early

Reconcile Accounts Early

Adjust Reserves Early

Alter Overhead Allocations Early

Review the Shipping Log Early

Review Billable Hours Early

Accrue Early

Accelerate Depreciation Calculations

Examine Commissions Early

Standardize the Accounting System

Centralize the Accounting System

Standardize Exception Handling

Centralize Travel Bookings

Process Centering

Mitigate Information Dependencies

Standardize the Report Layout

Reduce the Financial Statements

Collect Report Information Early

Electronic Delivery

Defer Activities

Automation Solutions

Intercompany Transactions

Consolidation Software

Enterprise Resources Planning Systems

Workflow Management Systems

Incremental Automation

Automation Summary

Ongoing Process Improvements


Chapter 5 Review Questions

Chapter 6 – Closing Cash

Learning Objectives


Overview of the Bank Reconciliation

The Bank Reconciliation Procedure

Bank Reconciliation Problems

The Bank Reconciliation Statement

The Timing of the Bank Reconciliation

Negative Cash on the Balance Sheet

Closing Petty Cash


Chapter 6 Review Questions

Chapter 7 – Closing Accounts Receivable

Learning Objectives


The Shipping Log Interface

Revenue Accruals

Revenue Recognition Rules

Treatment of Deferred Revenue

Issues with Subcontractors

Recurring Invoices

Rebillable Expenses

Reconciling Accounts Receivable

Non-Trade Receivables

The Allowance for Doubtful Accounts

Recording Contra Revenue


Chapter 7 Review Questions

Chapter 8 – Closing Inventory

Learning Objectives


Valuation Step 1: The Quantity of Inventory on Hand

The Periodic Inventory System

The Perpetual Inventory System

The Gross Profit Method

Valuation Step 2: Inventory Costing (Typical Inventory)

The First In, First Out Method

The Last In, First Out Method

The Weighted Average Method

Standard Costing

The Retail Inventory Method

Valuation Step 3: Overhead Allocation

Valuation Step 4: Inventory Valuation

The Lower of Cost or Market Rule

Obsolete Inventory Accounting


Chapter 8 Review Questions

Chapter 9 – Closing Fixed Assets

Learning Objectives


Initial Asset Recognition

The Depreciation Entry

Interest Capitalization

Asset Impairment

Reconciling Fixed Assets


Chapter 9 Review Questions

Chapter 10 – Closing Accounts Payable

Learning Objectives


Accounts Payable Accruals

Invoice Approval Delays

Expense Reports

Issues with the Credit Card Close

Accounts Payable Suspense Items

Reconciling Accounts Payable


Chapter 10 Review Questions

Chapter 11 – Closing Payroll

Learning Objectives


The Wage Accrual

The Commission Accrual

The Bonus Accrual

The Payroll Tax Accrual

The Benefits Accrual

The Vacation Accrual

Reconciling Compensation Accruals


Chapter 11 Review Questions

Chapter 12 – The Income Statement

Learning Objectives


Income Statement Overview

The Single-Step Income Statement

The Multi-Step Income Statement

The Condensed Income Statement

The Contribution Margin Income Statement

The Multi-Period Income Statement

The Statement of Activities

How to Construct the Income Statement

Other Income Statement Topics

What is a Cash Basis Income Statement?

What is a Partial Income Statement?

What are Headline Earnings?


Chapter 12 Review Questions

Chapter 13 – The Balance Sheet

Learning Objectives


Overview of the Balance Sheet

The Common Size Balance Sheet

The Comparative Balance Sheet

The Nonprofit Balance Sheet

Unrestricted Net Assets

Temporarily Restricted Net Assets

Permanently Restricted Net Assets

How to Construct the Balance Sheet

Other Balance Sheet Topics

Does an Expense Appear on the Balance Sheet?

Where do Accruals Appear on the Balance Sheet?

What is Order of Liquidity?


Chapter 13 Review Questions

Chapter 14 – The Statement of Cash Flows

Learning Objectives


Overview of the Statement of Cash Flows

Statement Objectives

Statement Requirements

Reporting Classifications

Sample Operating Activity Cash Inflows and Outflows

Sample Financing Activity Cash Inflows and Outflows

The Direct Method

The Indirect Method

Presentation Variations

Grouped Activities in a Partial Statement of Cash Flows

Combined Activities in a Partial Statement of Cash Flows

Information Sources

Illustration of the Preparation of a Statement of Cash Flows

Condensed Income Statement

Change in Certain Balance Sheet Accounts


Chapter 14 Review Questions

Chapter 15 – The Statement of Retained Earnings

Learning Objectives


Overview of the Statement of Retained Earnings

How to Prepare the Statement of Retained Earnings


Chapter 15 Review Questions

Chapter 16 – Financial Statement Disclosures

Learning Objectives


Accounting Disclosures


Chapter 16 Review Questions

Chapter 17 – Segment Reporting

Learning Objectives


Overview of Segment Reporting

Segment Disclosure

Segment Disclosure

Products, Services, and Customer Disclosure

Geographic Area Disclosure


Chapter 17 Review Questions

Chapter 18 – Interim Reporting

Learning Objectives


Overview of Interim Reporting

General Interim Reporting Rule

Variations from the Interim Reporting Rule

Changes in Accounting Principle in Interim Periods

Changes in Accounting Estimate in Interim Periods

Error Correction in Interim Periods

Adjustments to Prior Interim Periods

The Integral View

The Discrete View

Comparison of the Integral and Discrete Views

Disclosures for Interim Reporting


Chapter 18 Review Questions

Chapter 19 – Earnings per Share

Learning Objectives


Basic Earnings per Share

Diluted Earnings per Share

Presentation of Earnings per Share


Chapter 19 Review Questions

Chapter 20 – The Public Company Close

Learning Objectives


The Public Company Closing Process

The Form 10-Q

The Form 10-K


Chapter 20 Review Questions

Chapter 21 – Controls for Closing the Books

Learning Objectives


Preventive and Detective Controls

Basic Controls

Additional Controls for Public Companies

Balancing Controls against Speed


Chapter 21 Review Questions

Chapter 22 – Record Keeping for Closing the Books

Learning Objectives


Month-End Record Keeping

Year-End Record Keeping

Public Company Record Keeping


Chapter 22 Review Questions

Chapter 23 – The Soft Close and Virtual Close

Learning Objectives


The Soft Close

The Virtual Close

The Reporting Package


Chapter 23 Review Questions

Review Question Answers and Rationales



Final Examination

Answer Sheet

Course Evaluation


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