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Year-End (2080-81) Closing For Accountants

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Year-End 2080-81 Closing For Accountants

Introduction

As we near the end of fiscal year 2080/81, it’s crucial for accountants to wrap up the year’s books accurately. This process is essential not only for meeting legal and tax requirements but also for providing clear financial insights that business leaders use to make important decisions.

Closing the books correctly ensures that your financial statements truly reflect the company’s financial status over the past year. It also sets a clean slate for the new fiscal year, helping avoid issues and ensuring compliance with all accounting standards.

To help you through this critical task, Khata Business Academy put together a simple yet through checklist. It covers everything from bank reconciliations and inventory checks to final tax calculations. Each point is designed to be straightforward and easy to understand, ensuring you can close the year confidently and without confusion. Here’s a straightforward guide to handling each key area effectively:

Banking

  1. Match all bank ledgers with respective bank statements: Ensure that the transactions recorded in your ledgers correspond exactly to those shown in the bank statements.
  2. Prepare Bank Reconciliations for every mismatch case: Identify and reconcile any discrepancies between your accounting records and the bank statements.
  3. Receive Bank Confirmation Letter for any loan or credit received: This confirms the exact amount of liabilities and is crucial for accurate financial reporting.
  4. Ensure that all EMIs & EQIs have been cleared and accounted: Verify that all installment payments and equity investments are correctly recorded and cleared from the accounts.

Debtors/Creditors

  1. Chase Overdue Receivables: Actively follow up on and collect payments that are past due.
  2. Confirm All Bills & Purchases Are Accounted for in Payables: Ensure every payable transaction is correctly entered and updated in the system.
  3. Confirm All Invoices Are Accounted for in Receivables: Verify that all receivable transactions are accurately recorded.
  4. Recheck Debtors with Credit Balance & Creditors with Debit Balance: Identify and resolve any inconsistency in debtor and creditor balances.

Administrative

  1. Perform Physical Stock Verification: Conduct a thorough count and verification of inventory to match physical stock to the ledger entries.
  2. Reconcile Payroll Taxes and Filings: Ensure that all payroll-related taxes and filings are correct and up-to-date.
  3. Ensure Accurate Accounting for Salaries & Wages with Deductions: Check the accuracy of all entries related to salaries, wages, and deductions.
  4. Pass Essential Adjustment Journal Entries at Year-End: Make necessary adjustments, such as for prepaid expenses, to accurately reflect year-end financials.

Fixed Assets

  1. Prepare Fixed Asset Register with Period & Categories: Update and maintain the fixed asset register, categorizing assets and noting relevant periods.
  2. Reconcile Fixed Asset Disposals: Accurately record any disposals of fixed assets during the year.
  3. Pass Journal Entry for Depreciation & Calculate Deferred Tax, if Needed: Record depreciation for all fixed assets and assess any associated deferred tax implications.
  4. Check for Impairment Loss on Fixed Assets: Evaluate fixed assets for any impairment and record losses as necessary.

Reporting

  1. Review the Trial Balance to Trace Errors: Scrutinize the trial balance to identify and correct any errors.
  2. Draft Provisional Financial Statements: Prepare initial drafts of the financial statements for review.
  3. Analyze Income Statement Variances with the Budget: Compare actual results with budgeted figures and analyze any variances.
  4. Prepare Financial Ratio Indexes: Calculate key financial ratios to assess the financial health of the business.

Taxation

  1. Compute and Pay the Final Installment of Advance Tax: Ensure the final advance tax payment is calculated accurately and paid on time.
  2. Check if All TDS has been Deposited & ETDS has been Filed: Verify that all required Tax Deducted at Source (TDS) payments have been made and that electronic TDS filings are complete.
  3. Check Compliance for VAT Return Filing: Confirm that all VAT returns are filed in accordance with regulations.
  4. Prepare VAT Reconciliations: Reconcile VAT accounts to ensure all VAT-related transactions are accurately recorded.

This checklist provides a clear path to ensuring that all financial aspects of the business are properly closed out at the end of the year, setting a strong foundation for the upcoming fiscal period. 

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