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Accounts Closing related to
Manufacturing Enterprises
Version 01 Revision 00
1. Preparatory Action
2. Ledger Scrutiny
3. Provision
4. Reconciliation
5. Validation
6. Comparison
7. Final Output
Key St...
a. Match opening entries / balances with previous period’s closing.
b. Ensure all voucher entries have been completed – Sa...
a. Verify if expenses provided for in previous period have been duly adjusted against
payments and not expensed again in t...
a. Provide for Depreciation.
b. Provide for Audit Fees.
c. Provide for Bad / Doubtful Debts.
d. Provide for Inventory Impa...
a. Obtain confirmation of balances from secured lenders.
b. Obtain confirmation of balances from unsecured lenders.
c. Obt...
k. Reconcile inter-unit / branch transactions.
l. Reconcile C / F / H Forms issued / received with Sales / Purchase Regist...
a. Check cash payment and receipt vouchers for authorization and correct recording.
b. Check all debit / credit notes for ...
a. Compare Gross margin and Cost of Goods Sold with previous period(s).
b. Compare Selling, Marketing and General (includi...
a. Draw final Trial.
b. Draw Balance Sheet (Statement of Financial Position).
c. Draw Statement of Changes in Equity (if a...
For queries / concerns, mail :
gupta.satya.prakash@icai.org
ThankYou
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Checklist to Finalization

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Non-exhaustive list of key activities leading to finalization of Accounts (of a manufacturing business) for the purpose of Reporting, for educational / reference use only (Version 01 Revision 00)

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Checklist to Finalization

  1. 1. Accounts Closing related to Manufacturing Enterprises Version 01 Revision 00
  2. 2. 1. Preparatory Action 2. Ledger Scrutiny 3. Provision 4. Reconciliation 5. Validation 6. Comparison 7. Final Output Key Steps
  3. 3. a. Match opening entries / balances with previous period’s closing. b. Ensure all voucher entries have been completed – Sales, Purchases, Expenses, Other Incomes, Payments, Receipts. c. Update Fixed Assets Register. d. Perform Physical Inventory Count. e. Perform Physical Asset Verification. f. Perform Physical Cash Count. g. Perform Physical Verification of Investments. h. Run Payroll Process. PreparatoryAction
  4. 4. a. Verify if expenses provided for in previous period have been duly adjusted against payments and not expensed again in the current period b. Verify if routine / periodic expenses have been duly recorded (eg. payroll, contracted labor, security, canteen, contracted transport, interest (expense), etc., Utilities viz. rent, electricity, telephone, etc.) c. Verify if relevant prepaid expenses brought over from the previous period have been charged / allocated to the current period as applicable. d. Verify if annual expenses have been duly accounted or provided for (viz. insurance, license fees, rates, taxes, annual maintenance contracts, etc.). e. Verify if transaction entries were made on holidays. f. Verify if all goods received have been recorded. g. Check cash for negative balance. h. Check inventory for negative balance. Ledger Scrutiny
  5. 5. a. Provide for Depreciation. b. Provide for Audit Fees. c. Provide for Bad / Doubtful Debts. d. Provide for Inventory Impairment. e. Provide for Fixed Asset Impairment. f. Provide for Accrued Interest (Income). g. Provide for Export (and / or any other) Incentives. h. Provide for Goods in Transit (Purchase / Sales). i. Provide for Income Tax (including AMT / MAT). Provisions & Accruals
  6. 6. a. Obtain confirmation of balances from secured lenders. b. Obtain confirmation of balances from unsecured lenders. c. Obtain confirmation of balances from sundry creditors (especially with debit balance). d. Obtain confirmation of balances from sundry debtors (especially with credit balance). e. Obtain bank balance confirmation certificate for CA, CC, OD, TL and any other account including bills discounted and not due, open hedge positions, etc. f. Tally Salary sheet with cash / bank payment, unpaid to be recorded as payable. g. Tally Bonus sheet with cash / bank payment, unpaid to be recorded as payable. h. Tally Incentive sheet with cash / bank payment, unpaid to be recorded as payable. i. Tally Commission sheet with cash / bank payment, unpaid to be recorded as payable. j. Reconcile Sale and Purchase Books with Excise and Sales Tax Records / Returns. Reconciliation
  7. 7. k. Reconcile inter-unit / branch transactions. l. Reconcile C / F / H Forms issued / received with Sales / Purchase Register. m. Reconcile Export Documents with Export Sales and Import Documents with Import Purchases. n. Reconcile Tax / Statutory Challans with Tax / Statutory Ledger. o. Reconcile inventory balance with physical inventory. p. Reconcile fixed assets register with physical verification thereof. q. Tally TDS returns with relevant ledgers and TDS certificates issued. r. Tally TDS ledgers with TDS certificates received. s. Reconcile all bank accounts. t. Reconcile physical cash with book balance. Reconciliation
  8. 8. a. Check cash payment and receipt vouchers for authorization and correct recording. b. Check all debit / credit notes for authorization and correct recording. c. Check whether both sides of the Trial Balance tallies. Validation
  9. 9. a. Compare Gross margin and Cost of Goods Sold with previous period(s). b. Compare Selling, Marketing and General (including Administration) Expenses with previous period(s). c. Compare Sales and Other Incomes with previous period(s). d. Compare EBIT, EBITDA, Interest (cost), DSCR with previous period(s). e. Compare Inventory, Receivables, Cash and other Asset items with previous period(s). f. Compare Equity, Outside long-term liabilities (Secured / Unsecured), Payables and other current liabilities / provisions with previous period(s). g. Compare Net Profit, Dividend (distribution), Reserves with previous period(s). Comparison
  10. 10. a. Draw final Trial. b. Draw Balance Sheet (Statement of Financial Position). c. Draw Statement of Changes in Equity (if applicable). d. Draw Profit & Loss Account (Statement of Income). e. Draw Cash Flow Statement. f. Prepare Notes to Accounts (including disclosure of accounting policies per applicable GAAP). g. Draw consolidated statements (if applicable). Final Output
  11. 11. For queries / concerns, mail : gupta.satya.prakash@icai.org ThankYou

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