{"id":5165,"date":"2014-11-26T07:29:19","date_gmt":"2014-11-26T05:29:19","guid":{"rendered":"http:\/\/www.officetodo.com\/public\/?p=5165"},"modified":"2014-11-22T07:30:02","modified_gmt":"2014-11-22T05:30:02","slug":"importance-of-closing-an-accounting-period","status":"publish","type":"post","link":"https:\/\/www.officetodo.com\/public\/importance-of-closing-an-accounting-period\/","title":{"rendered":"Importance of closing an accounting period"},"content":{"rendered":"<p>The importance of closing accounts for a determined period derives from understanding the importance of financial reporting in the first place.\u00a0<strong>Financial reporting is for having accurate accounts about a company and it\u2019s performance<\/strong>. Without those the business could possibly go into bankruptcy since it\u2019s not in compliance with regulations (i.e. not paying taxes in due time, in required amounts), it would be unable to meet it\u2019s creditors demands due to insufficient cash flows and liquidity problems (since the accounts didn\u2019t reflect accurate demand of raw material for an example and the company kept purchasing more when it didn\u2019t need this much goods). These effects in turns impact people, they would lose their jobs and so on.\u00a0<!--more--><\/p>\n<p>Therefore it is important to understand where the company is, it\u2019s financial position and how it\u2019s performing, it\u2019s income statement.<\/p>\n<p><strong>The way to do that, at least one measure for achieving this, is ensuring that the company\u2019s accounts are kept day-to-day by certain accounting routines and that the periods the company is measured by, are prepared (i.e. \u2018closed\u2019) using exhaustive and routine procedures.\u00a0<\/strong>By word \u2018exhaustive\u2019 I mean that the procedures carried through are in fact relevant and none are excluded merely due to lack of time or unwillingness to carry them through. Just the same the routines should be written down and understandable for everyone participating in closing the accounts and in the accounting in general.<strong>\u00a0Remember, it\u2019s not just about the closing of the period but ensuring that certain routines are followed thoughout the period \u2013 only then it can be assured that the closing itself goes smoothly.<\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"<p>The importance of closing accounts for a determined period derives from understanding the importance of financial reporting in the first place.\u00a0Financial reporting is for having accurate accounts about a company and it\u2019s performance. Without those the business could possibly go into bankruptcy since it\u2019s not in compliance with regulations (i.e. not paying taxes in due [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[74],"tags":[],"class_list":["post-5165","post","type-post","status-publish","format-standard","hentry","category-2-7-accounting-in-itself"],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/posts\/5165","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/comments?post=5165"}],"version-history":[{"count":1,"href":"https:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/posts\/5165\/revisions"}],"predecessor-version":[{"id":5166,"href":"https:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/posts\/5165\/revisions\/5166"}],"wp:attachment":[{"href":"https:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/media?parent=5165"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/categories?post=5165"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/tags?post=5165"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}