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 @ 707/292-8415 or jmurphy@mcn.org.