Chapter 18. Adjusting and Closing Entries
Every company will develop a procedure for recording the transactions that happen every day. Checks will come in, invoices will be sent, and bills will be received, and the company will put in place standard ways of handling these events. Maybe every bill gets recorded as an account payable. Maybe every invoice is recorded as a sale and a receivable. Checks will usually be used to reduce accounts receivable. The standard way in which a company processes these items will depend on the company and the nature and type of transactions it has.
At the end of the accounting period, financial statements will be prepared. As part of this process, the accountant must review the trial balance and ascertain whether ...
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