At the year end, a company must go through the process of adjusting each entry to an account in order to properly state these entries for financial statement preparation purposes.

There are many kinds of required adjustments. These can include the accrual or deferral of revenue or expense items, reclassification, adjustments to conform book figures to physical counts (stock), and reflecting on any unusual transactions.

No matter what twelve month period a company’s accounting year covers, the initial accounting year end date will be on the first anniversary of the end of the month in which it was incorporated.

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