Which of the following best describes the recommended sequence for year-end closing?

• A. Reconcile all accounts, review profit and loss statements and balance sheet, and run year-end reports; adjust as needed.
• B. Only reconcile bank accounts and ignore others.
• C. Export data to CSV and stop.
• D. Delete prior year transactions.

Answer: (A)

Closing the books for the year should be a thorough process that ensures every piece of data lines up and the financial statements truly reflect the year’s activity. The best sequence starts with reconciling all accounts so ending balances match statements from banks, credit cards, loans, and other ledgers. This step catches errors, mispostings, and ommissions across the entire set of accounts, not just one area, and it prevents incorrect numbers from carrying into the next year.

Next, review the profit and loss statement and the balance sheet. This helps verify that revenues and expenses are correctly classified and that assets, liabilities, and equity are accurate for the period. It gives a clear view of profitability and financial position and helps spot misclassifications or accruals that should be adjusted before closing.

Finally, run year-end reports to document the year’s activity, support tax preparation, and provide audit-ready records. If anything in reconciliation or review signals adjustments, make those now so the books truly reflect the year before finalizing.

Other approaches don’t provide a complete, defensible year-end picture: reconciling only one area leaves others unchecked; exporting data and stopping ends the process prematurely; deleting prior year transactions erases the historical record and can violate audit trails.