Accounts Finalisation

Accounts finalisation is the last crucial step in the financial reporting process for businesses. It involves ensuring that all financial transactions and records are accurately recorded, classified, summarised, and presented in the financial statements. This process is essential for providing a clear and transparent picture of the company’s financial performance and position to stakeholders.

1. Closing Entries and Adjustments: Accounts finalisation begins with making closing entries and adjustments to ensure that all revenue, expense, and other temporary accounts are properly closed out for the accounting period. This includes adjusting entries for accruals, prepayments, depreciation, and other adjustments necessary to reflect the true financial position.
2. Trial Balance and Financial Statements: Once closing entries and adjustments are made, a trial balance is prepared to ensure that debits equal credits and that the accounts are in balance. Subsequently, the financial statements, including the balance sheet, income statement, and cash flow statement, are prepared based on the adjusted trial balance.