A client is extremely pleased with his company’s performance for the first month and has contacted your manager, Mr. Johnson, to see...

In accounting, it's very important to leave a "paper
trail."  Every action must be justified and
detailed. 

Opening entries are important as they indicate
either the opening of a brand new account or the existing balance of an established
account at the beginning of each new month.   All entries from that point forward in
time either increase or decrease what was in the account on the first day of the month. 
Opening entries need to be specifically listed as such with the opening day and
amount. 

Adjusting entries are entries that are out of the
ordinary for a particular type of account and "adjust" it for some reason.  They can be
for any number of occurrences, but they need to draw the reader's attention and explain
in as much detail as possible what happened and why.  The reason for this is that
people's memories fade over time and the reason for the entry may not be so readible
available in the future.  So, document it well so it's self
explanatory. 

At the end of the month, there are certain
accounts that need to be closed out in preparation for the next month.  Most of these
accounts pertain to the income statement and are only temporary.  They need to show the
closing balance when the month ended and show where the balances were moved to as they
were closed.  Most will show a zero balance after they're closed for the beginning of
the new month.  On the other hand, most asset, liability, and capital accounts don't
usually need to be closed, but it's nice to see where the account is at the beginning of
the new month.  

Neglecting opening, adjusting, and closing
entries makes its difficult, if not impossible to issue the financial statements that
are so vital to a company's management and financial success.  By making all necessary
entries to its books, both at the beginning, in the interim, and at the ending of a set
accounting period, it's easier for a company to keep a thumb on its progress on a
day-to-day basis.  And of equal importance--if a company's books are ever audited, a
well kept and accurate "paper trail" makes it easy to prove a company's honesty and
integrity, as well as its professionalism.