Course · Act I: How a Business Works · Act I case study
Closing the books: a small-business case
Case study: close a month of a café’s books, from the opening balance sheet to the closing one, and explain to a banker why profit and cash differ.
Key terms
- Closing the books
- Applying a period’s transactions to the opening balance sheet to get the closing one.
- Profit vs. cash
- They differ whenever cash moves without revenue or an expense, such as loan repayments, buying equipment or customers paying late.
“The Bank Meeting” is part of the full course: 6 puzzles on closing the books: a small-business case, with a story that carries through all five acts. Try this act’s free chapter, “Revenue, Costs, Profit”, first.