Chapter 5, Problem 1A

Rather than going directly to college, some students take time off to travel abroad, learn new skills, or volunteer. This period is known as a “gap year” Real Gap Experience provides hundreds of gap year traveling opportunities in over 45 countries around the world. The company offers everything from volunteering to building houses in Guatemala to teaching in China (for pay) to taking a year-long, around-the-world trip. What does this have to do with accounting, and why is it important? Every company needs to keep a record of its financial activities so that financial statements can be presented and used for decision making. Real Gap Experience’s accounting records are most likely computerized, but the company still needs to go through the closing process. Why is the closing process important to a company such as Real Gap Experience? What types of accounts would be used during the closing process for this company?