Company Closing Process Essay Example | Topics and Well Written Essays - 1000 words

Company Closing Process - Essay Example Basically there are three procedures completed under month-end process: adjustments, calculations and reporting. Adjustment is the first step where necessary amendments are done on the financial data or information already recorded. During the month, the organization earns revenue and incurs expenses and matches the two. This practice, result in differences between the estimated amount and the actual amount of an item (Bosua & Beer, 2009). For example, interest expense incurred on the prevailing firm’s loans increase the amount to be paid (principal and interest). The original amount to be paid was the principal, while the actual amount paid at month end is the principal plus interest. Therefore, adjustment has to be made to reconcile the two amounts. Calculations After the above adjustments are made, the affected individual accounts have to be updated. The amounts for adjustment are calculated and appropriate entries made to the appropriate ledger accounts. For example, in ba nk accounts adjustment calculations, it is started with the opening balance, add on the deposits made and then subtract the debits for that month. The final figure got, reflect the actual cash balance on the bank account as opposed to the opening balance figure. Reporting After ascertaining the actual amounts of each ledger account, the figures are entered into the organizations database. The personnel responsible for the month-end procedures avails several reports reflecting the organization’s financial position in different ways, such as profit and loss statement, to the management. Year end close process The year end process refers to a set of activities the company performs to close financial books, make adjustments, correct errors and produce financial statements such as balance sheet in correspondence with existing rule and regulations such as international financial reporting standards (IFRS) and generally accepted accounting principles (GAAP). These activities involve several personnel such as accountants, bookkeepers and financial manager working under guidance of senior staff (Warfield, Weygandt & Kieso, 2008). There are four basic activities completed: adjustment entries posting, error correcting, trial balance preparation and financial statement preparation. Under adjusting entries, postings are made to reflect exactly what the company made and spent of the period under review. The adjustments concern prepaid expenses and unearned revenues. Prepaid expenses refer to cash paid by the business in advance understanding that specific tasks will be performed in its favor in the future, whereas unearned revenue refers to the cash money the company accepted promising to provide services or goods at a future date. In correcting errors, the company’s management is able to remove the mathematical imprecision from the book closing mechanism. The errors are a result of regulations changes, numerical incorrectness and poor accounting rules applica tion. This is a vital activity as it is integral to the closing process of the company’s financial statements. Trial balance preparation comes after error corrections and adjustment postings. The trial balance preparation helps managers verify the accuracy of the already completed and closed accounts. The trial balance checks the total debits and credits of all the involved accounts. If the two, total debits and total credits, are equal most likely the accounts are accurate. However, it should be noted

What are the effects of temperature on electricity demand in Essay

What are the effects of temperature on electricity demand in Sacramento, California in July and August 2008 in the daytime - Essay Example Moreover, positive linear relationships have appeared between the electric consumption and the selected variables of weather conditions. For proper planning of future investments in energy generation sector, policy makers require forecasts of electricity demand. The demand of electricity consumption in California has more than quadrupled since 1960. There are various factors, which are contributing to the increased energy consumption in California such as uncertain regulatory environment, swift population growth and economic growth. Apart from that, climatic change is another factor, which can also influence the electric consumption thereby, affecting the long term planning of electricity supply. Since climatic changes such as lower heating demand and higher cooling demand can directly influence the energy consumption in any economy therefore, this research study will evaluate its effects on energy consumption in Sacramento, California. This research will also assist the policy makers to analyze the extent to which the weather conditions can affect the energy consumption in Sacramento. Therefore, it will be very usef ul to meet the challenge of energy consumption demands in Sacramento. After conducting this research study, the answers to various questions will be achieved such as, what is the impact of weather conditions on electricity consumption? What are the affects of global warming on electricity consumption? The forecasts of electricity demand in an economy are made in consideration to the factors such as technological changes, income of consumers, population growth and prices. However, researchers have found that weather conditions variables should be also used to forecast electricity demand. A huge literature work has been done to study this relationship. In California, the population growth in the hotter interior regions of the state is causing growth in cooling demand, which