Financial Accounting - Closing Process

The financial accounting closing process is the final step in the accounting cycle. We will learn why the closing process is needed and be able to perform the closing process in multiple ways.

In addition to instructional video, this course will include downloadable

• Downloadable PDF Files

• Excel Practice Files

• Multiple Choice Practice Questions

• Short Calculation Practice Questions

• Discussion Questions

The PDF files allow us to download reference information we can use offline and as a guide to help us work through the material.

Excel practice files will be preformatted so that we can focus on the adjusting process and learning some of the basics of Excel, like addition, subtraction, and cell relationships.

Multiple choice example question helps us improve our test-taking skills by reducing the information into the size and format of multiple-choice questions and discussing how to approach these questions.

Short calculation questions help us reduce problems that have some calculation down to a short format that could be used in multiple-choice questions.

Discussion Question will provide an opportunity to discuss these topics with the instructor and other students, a process many students find very helpful because it allows us to see the topic from different viewpoints.

As indicated by the title, the closing process takes place at the end of the accounting cycle. The main event of the accounting cycle is the financial statements. Once we have completed the financial statements we need to get ready for the next accounting period, get ready with the closing process.

The closing process will zero out temporary accounts including income statement accounts of revenue and expenses and the draws or dividends account.

We can perform the closing process in multiple ways. We will consider the closing process from three perspectives. Each perspective has pros and cons and the repetition of each method as well as performing the closing process from multiple angles will provide a solid understanding of the concepts.

Understanding the closing process helps us understand the concept of temporary accounts and permanent accounts, which helps us understand the relationship between the financial statements and how to read them.