As we learned in Analyzing and Recording Transactions and The Adjustment Process, Mark Summers has started his own dry-cleaning business called Supreme Cleaners. Mark had a busy first month of operations, including purchasing equipment and supplies, paying his employees, and providing dry-cleaning services to customers. Because Mark had established a sound accounting system to keep track of his daily transactions, he was able to prepare complete and accurate financial statements showing his company’s progress and financial position.
In order to move forward, Mark needs to review how financial data from his first month of operations transitions into his second month of operations. It is important for Mark to make a smooth transition so he can compare the financials from month to month, and continue on the right path toward growth. It will also assure his investors and lenders that the company is operating as expected. So what does he need to do to prepare for next month?