STEPS IN THE ACCOUNTING PROCESS
1. Record the transactions of a business in a JOURNAL book of original entry - the day - by day record of the transactions of a firm). Entry should be based on some source document or evidence that a transaction has occurred, such as an invoice, a receipt, or a check.
2. Post entries to the accounts in the LEDGER. Transfer the amounts from the JOURNAL to the Debit or Credit column of the specified accounts in the LEDGER. Use a cross reference system. Accounts are placed in the LEDGER according to the account numbers assigned to them in the CHART OF ACCOUNT.
3. Prepare a TRIAL BALANCE. Record the balances of the LEDGER accounts in the appropriate Debit or Credit column of the Trial balances form. Prove that the total of the debit balances equals the total of the credit balances.
RECORDING BUSINESS TRANSACTION
To repeat Business transactions are events that have a direct effect on the operations of an economic unit or enterprise and are expressed in terms of money. Each business transaction must be recorded in the accounting records. As one records business transactions, one has to change the amounts listed under the headings Assets, Liabilities, and Owners Equity. However, the total of one side of the fundamental accounting equation should always equal the total of the other side.
Showing posts with label Accounting. Show all posts
Showing posts with label Accounting. Show all posts
Monday, February 18, 2013
What is Accounting, Accountant, Bookkeeper, and Computer
ACCOUNTING
Accounting - Is the process of Analyzing, Classifying, Recording, Summarizing and Interpreting business transaction in financial or monetary terms.
Accountant - Takes that information and prepares the financial reports that are used to analyze the company's financial position.
Bookkeeper - An individual who earns a living by recording the financial activities of a business and who is concerned with the techniques involving the recording of the transactions.
Computer - Is taking over the acccounting's job of completing financial reports. It is important to understand that the computer is only a tool that is doing the routine bookkeeping operations that previously took days or months to complete.
Accounting - Is the process of Analyzing, Classifying, Recording, Summarizing and Interpreting business transaction in financial or monetary terms.
ACCOUNTANT
Accountant - Takes that information and prepares the financial reports that are used to analyze the company's financial position.
BOOKKEEPER
Bookkeeper - An individual who earns a living by recording the financial activities of a business and who is concerned with the techniques involving the recording of the transactions.
COMPUTER
Computer - Is taking over the acccounting's job of completing financial reports. It is important to understand that the computer is only a tool that is doing the routine bookkeeping operations that previously took days or months to complete.
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