Month-End Close & Consolidation
The terms behind closing the books, at one entity or across a hundred: consolidation, fiscal periods, and what it takes to make the numbers final.
9 terms
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01
Close Process
Accrual Basis
A fundamental accounting method that recognizes revenue when earned and expenses when incurred, regardless of when cash changes hands.
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02
Consolidation
Consolidated Financial Statements
Financial reports that combine the accounts of a parent company and its subsidiaries, presenting them as if they were a single economic entity.
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03
Consolidation
Consolidation
The process of combining the financial statements of multiple related entities into a single set of financial statements that presents the financial position, results of operations, and cash flows of the combined group.
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04
Close Process
Continuous Close
Continuous close is the practice of reconciling and closing the books as transactions happen, rather than compressing that work into the end of the month.
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05
Close Process
Fiscal Year
A 12-month accounting period that an organization uses for financial reporting and budgeting purposes, which may differ from the calendar year.
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06
Close Process
Matching Principle
An accounting concept requiring that expenses be recognized in the same period as the revenues they helped generate.
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07
Close Process
Month-End Close
Month-end close is the process of finalizing a company's books for the month: reconciling accounts, reviewing and posting adjusting entries, and producing financial statements that are ready to report on.
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08
Consolidation
Multi-Entity Accounting
Multi-entity accounting is running the books for more than one legal entity, subsidiary, or business unit inside a single, coherent system, rather than in separate instances that need to be reconciled together afterward.
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09
Close Process
Variance
The difference between planned or budgeted amounts and actual results, used to analyze performance and identify areas needing attention.