by Jeremiah (Jerry) Murphy
November 2019 Presentation at Coast Women in Business
MONTH: __________ YEAR: _____
| PREPARER INITIALS | DATE | |
| CASH | ||
| Reconcile bank accounts and verify that bank balance on bank reconciliation agrees with respective bank statement balance. | ||
| Verify cash reflected on trial balance agrees to ending cash balance on bank reconciliation. | ||
| Review outstanding checks and deposits for old transactions that may need to be voided. | ||
| UNDEPOSITED FUNDS | ||
| Balance in account should be reconciled to specific deposits clearing in the next month. | ||
| Verify all undeposited funds from prior month have cleared in current month. | ||
| ACCOUNTS RECEIVABLE | ||
| Run accounts receivable aging report and verify that total agrees with balance on trial balance. | ||
| Determine whether any past due balances need to be written off. | ||
| Review accounts receivable aging for any unapplied credits. | ||
| INVENTORY | ||
| Compare inventory total to trial balance. Prepare & post adjustment if necessary. | ||
| Determine if any obsolete inventory exists that needs to be written off. | ||
| FIXED ASSETS | ||
| Identify fixed asset additions and disposals during the period and document the following: • Acquisition / disposal date • Asset description • Proceeds received on sale / disposal | ||
| Reconcile balance sheet account balances to depreciation schedule cost and accumulated depreciation totals. | ||
| Verify depreciation expense has been properly recorded. | ||
| RECONCILE INTERCOMPANY ACCOUNTS | ||
| Verify that intercompany payables and receivables have same balance in each entity’s books. | ||
| PREPAID EXPENSES | ||
| Verify balances agree to a supporting schedule and can be traced to payments for items paid for in advance. | ||
| Determine reasonable amount has been recognized as monthly expense. | ||
| NOTES RECEIVABLE | ||
| Verify ending account balance agrees with the related loan amortization schedule. | ||
| ACCOUNTS PAYABLE | ||
| Run accounts payable aging report and verify that total agrees with balance reflected on trial balance. | ||
| Review accounts payable aging for unapplied credits. | ||
| ACCRUED PAYROLL AND VACATION | ||
| Trace balance in account to supporting payroll records for vacation payable and payroll accrual for the respective month. | ||
| Determine correct amount of days’ pay in accrual when calculating liability. | ||
| ACCRUED PROPERTY TAX | ||
| Verify monthly accrual is equal to 1/12 of prior year expense. | ||
| ACCRUED SALES TAX | ||
| ACCRUED PAYROLL TAXES | ||
| Trace to the payroll tax returns filed in the following month (state) and/or tax payments made next month for a current month payroll. | ||
| OTHER PAYROLL LIABILITIES | ||
| Verify that any balances in this account(s) agree with liabilities or withholdings unpaid by month-end (for example, health insurance, 401k, etc.). | ||
| NOTES PAYABLE-BANK | ||
| Reconcile bank balance to book balance in the note account with amortization schedules or statements received from the bank or other lender. | ||
| Determine if monthly interest expense has been properly recorded. | ||
| EQUITY | ||
| Verify that owners’ personal expenses are recorded properly in the drawing account or in owner receivable account. | ||
| Verify that retained earnings or capital agree with balances on prior year tax return. | ||
| EXPENSES – Review the detail of the following accounts to verify proper classification (not limited to this list) | ||
| Repairs – check for expenditures that should be capitalized rather than expensed. | ||
| Scan general ledger to verify accuracy of entry classification in other accounts. |
This list is meant to be a guide to the month-end closing process. It is general but can be tailored to your specific situation and needs. We are available to help with this month-end process and look forward to working with you. If you need assistance with this process, please feel free to contact Jerry Murphy at jmurphy@mcn.org.
About the Presenter
Jeremiah (Jerry) Murphy recently opened Polaris Consulting, providing business consulting and evaluations, accounting, and tax services nationwide. He started his accounting firm on the Mendocino Coast in 1976. Jerry focused on helping small and mid-sized businesses with issues such as income taxes for individuals, partnerships, and corporations; audits of nonprofit organizations, business compilations, and reviews; and QuickBooks set-up, use, and problem-solving.
Jerry also wrote the “Buy-Sell Agreements” eBook for Commerce Clearing House’s Solutions for Business Advisors website. He earned a Bachelor of Science degree in accounting from the University of Maryland, and is a Certified Public Accountant in California. You can reach him at jmurphy@mcn.org.
About Coast Women in Business
Coast Women in Business supports the business community on the Mendocino coast. We meet monthly to foster entrepreneurship and professional development on the Mendocino Coast and beyond. Membership fees are $50 annually or $10 per drop-in meeting.
Note: We welcome all – all races, all genders, all countries of origin, all sexual orientations.
Your first meeting is always free, and we offer a limited number of need-based memberships—please inquire. We’re sponsored by the Women’s Business Center at the West Business Development Center. We look forward to seeing you at our next meeting!
Please contact us with any questions. We look forward to hearing from you!