Monthly Closing Checklist

MONTH: __________ YEAR: _____

PREPARER INITIALSDATE
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.

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