In This Chapter
Counting your company’s cash
Finalizing the cash journals
Balancing out your bank accounts
Posting cash-related adjustments
All business owners — whether the business is a small, family-owned candy store or a major international conglomerate — like to periodically test how well their businesses are doing. They also want to be sure that the numbers in their accounting systems actually match what’s physically in their stores and offices. After they check out what’s in the books, these business owners can prepare financial reports to determine the company’s financial success or failure during the last month, quarter, or year. This process of verifying the accuracy of your cash is called proving out.
The first step in proving out the books involves counting the company’s cash and verifying that the cash numbers in your books match the actual cash on hand at a particular point in time. This chapter explains how you can test to be sure the cash counts are accurate, finalize the cash journals for the accounting period, prove out the bank accounts, ...