Year end adjusting entries
Year Ending adjusting entries duties performed by accountants and bookkeepers to close out the year. Many mundane tasks include adding the check names and classifications but other more important responsibilities are required.
This article explains many of the duties and responsibilities.
The tasks include:
Reconciling all bank accounts:
- Removing uncleared transactions from the bank accounts
- Reconciling all credit cards and loans. Ensure the interest is correctly calculated
- Grossing up payroll to match the payroll reports
- Verifying the payroll taxes are reflected on the financial statements the correct way.
- Calculate mileage or use gasoline and depreciation as the auto expense.
- Verify personal monies used for business are correctly recorded
- Discuss inter company entries with the owner
- Check the general ledger for accuracy
Other duties include:
- Examining transactions to see if they are 2016 expenses. Correctly date transactions for the year in which they apply
- Reviewing payroll and liabilities for accrual entries
- Deciding if the firm has bad debts and deciding how to treat those in QB
- Close out all temporary accounts –holding etc.
- Check retained earnings for correct beginning balance
- Be sure inventories are done and cost of goods sold is correct
- Issue 1099s as required
- Verify interest and principal are amortized and recorded according to the schedules
- Remove personal expenses from the PL to distributions
- Send in all year ending forms.
- Prepare 941s as needed
- Prepare annual reconciliations for Fed State and Local Authorities
- Give W 2 s to employees
- Check W3s against QuickBooks for accuracy.
- Complete annual reconciliations and send to tax authorities
- Complete CAT tax return in Ohio
- Complete 941 and IT3 and send in
Prepare 1099s as needed. Mail by the Jan 31 deadline
Fixed assets need to be tracked with a cost and depreciation schedule.
- Sub accounts can be created under fixed assets to account for various new purchases.
- If fixed assets are sold –calculate gain or loss and record on Profit and Loss.
Shareholder investment and loans
- Account for shareholder activity and distributions via the shareholder loan and distribution accounts.
Cost of sales:
- Decide on a method for calculating cost of goods sold .
- Conduct a physical inventory.
- Run a profit and loss detail verify all transactions are categorized correctly. Verify that all data is there. ( No missing transactions )
- Run a balance sheet detail and verify that all is categorized correctly
- Prepare dividend or distribution checks as needed.
Year End :
Year end accounting and bookkeeping is a tedious task aimed at ensuring the financial statements are in order.
This ensures tax returns are completed accurately and timely.