Monthly Closing of Accounts

It is nothing but drawing a line at the end of month with the data upon preparation of financial statements.  This is because of the assumption that corporate have to submit lot of reports internally as well as to external agencies and changing the figures upon these submission leads to mismatch of data.  Even some banks/statutory agencies can ask for explanation in case of mismatch.

Originally posted by : Suresh
	It is nothing but drawing a line at the end of month with the data upon preparation of financial statements.  This is because of the assumption that corporate have to submit lot of reports internally as well as to external agencies and changing the figures upon these submission leads to mismatch of data.  Even some banks/statutory agencies can ask for explanation in case of mismatch.

yes agreed 

This will also very much helful if a company adopt a budgetbased accounts. You can know the position as where you are standing in the financial strength of the company. If someting goes beyond budget you can scrutinize then & there before annual closing to put an end to these hundles.