The most critical work product of the accounting department is the year-end close, resulting in the issuance of full-year financial statements. This close involves all of the usual month-end closing activities, plus a number of additional tasks. It also requires an inordinate amount of staff time that begins weeks before the last day of the year and may continue for over a month afterwards.
The Year-End Close discusses the actions needed to close the books at the end of the fiscal year, as well as other activities required at the end of the calendar year. There is a particular emphasis on several major areas of accounting, including receivables, inventory, fixed assets, payables, and payroll. Additional tasks required for the year-end close of a publicly held company are also described, giving you a full depiction of the necessary tasks to close the books at the end of the year.
Upon successful completion of this course, participants will be able to:
- Recognize the staffing policies needed to ensure that there are sufficient staff on hand to complete the year-end close.
- Identify the activities involved in archiving accounting documents.
- Note the steps involved in the construction of the annual budget.
- Identify the contents of the year-end binder.
- Recognize the situations in which a soft close is more likely to result in financial statement errors.
- Note how to verify the reasonableness of the balance in the allowance for doubtful accounts.
- Recognize the tasks involved in the year-end examination of open jobs.
- Identify the evaluation criteria stated in the lower of cost or market rule.
- Note the methods used to recognize fixed assets reclassified out of the held-for-sale classification, and fixed assets that have been abandoned.
- Note the distribution of the Form 1099-MISC, as well as how the form is to be completed.
- Identify the trigger that causes a change in the experience rating assigned by a government.
- Recognize the role of EDGARizing in the year-end close.
- Note the steps required for the preparation of financial statements.
Table of Contents
Chapter 1 – The Year-End Close
The Calendar and Fiscal Years
The Year-End Work Load
The Year-End Calendar
General Accounting Closing Activities
Annual Performance Reviews
Create New Files
Transfer Documents to Long-Term Storage
Review Journal Entries
Update the Chart of Accounts
The Year-End Book
The Soft Close
Chapter 1 – Review Questions
Chapter 2 – Receivables Year-End
Verify the Allowance for Doubtful Accounts
Clean the Receivables Aging Report
Match the Receivables Aging to the General Ledger
Chapter 2 – Review Questions
Chapter 3 – Inventory Year-End
The Physical Inventory Count
Prior to the count
Verify Inventory Valuation
Verify Open Jobs
Examine Cost Pools
Examine Obsolete Inventory Reserve
Examine for Lower of Cost or Market
Review Outstanding Bill and Hold Transactions
Chapter 3 – Review Questions
Chapter 4 – Fixed Assets Year-End
Calculate Year-end Depreciation
Document Interest Capitalization
Verify Asset Retirement Obligations
Investigate Asset Impairment
Verify Held-for-Sale Assets
Investigate Repairs and Maintenance
Derecognize Fixed Assets
Conduct a Fixed Asset Physical Count
Verify the Fixed Asset Register
Complete a Fixed Asset Roll Forward
Chapter 4 – Review Questions
Chapter 5 – Payables Year-End
Unremitted Expense Reports
Delay the Supplier Invoice Cutoff
Record within the Correct Period
Settle Disputed Invoices
Clean up Prepaid Expenses
Match Payables Aging to General Ledger
The Form 1099-MISC
Treatment of Incorrect Filings
Form 1099 Administrative Issues
Chapter 5 – Review Questions
Chapter 6 – Payroll Year-End
Human Resources Inputs
Update the Experience Rating
Update the Mileage Reimbursement Rate
Payroll-Related Tax Filings
Chapter 6 – Review Questions
Chapter 7 – Public Company Year-End
The Public Company Closing Process
The Form 10-K
Public Company Record Keeping
Chapter 7 – Review Questions
Chapter 8 – The Closing Checklist
Balance Sheet Reconciliations
Preparation of the Financial Statements
Chapter 8 – Review Questions
Review Question Answers and Rationales
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