Closing entries are made at the end of an accounting period which requires that balance are transferred from temporary to permanent accounts.

Shelly is the office manager of a local medical practice. She has come to the end of the closing process and needs to prepare for the next accounting period. Shelly uses the 4-step closing process to close the temporary accounts.

1, What are the steps that Shelly must follow? Explain each step in the process.

2, Explain the significance of preparing financial statements after closing activities.

What is the benefit of preparing the post-closing trial balance and classified balance sheet after the closing entries are made?