![]() ![]() An organization initially records every financial transaction in a general journal, where the entries are called journal entries. Preparing a general ledger is a crucial step in the accounting process Accounting Process The accounting process is the series of steps followed by the business entity to record the business financial transactions, which includes steps for collecting, identifying, classifying, summarizing, and recording of the business transactions in the company's books of accounts so that the entity's financial statements can be prepared and the profits and financial position of the business can be known at regular intervals of time. Over the years, computer applications have computerized the process to save time and minimize errors. Earlier, accountants made manual ledgers which were taxing.read more remains free of accounting errors. It is based on the accounting equation that states that the sum of the total liabilities and the owner's capital equals the total assets of the company. ![]() Using this computation, an organization’s balance sheet Balance Sheet A balance sheet is one of the financial statements of a company that presents the shareholders' equity, liabilities, and assets of the company at a specific point in time. are left with an organization at the end of an accounting year. This helps in computing how much assets, liabilities or revenue sources, etc. The ledgers allow balancing of the debit and credit balances of all accounts using subtractions and additions.The balance sheet and income statement are prepared using the trial balance. Thereafter, journal entries are taken to the general ledger that balances separate accounts such as cash, salary for the trial balance. The accounting steps start with recording financial transactions in a general journal General Journal The General Journal is a book of entry that holds the initial record of every transaction before being posted to the concerned accounts like Sales Journal, Purchase Journal, & Cash Journal etc.A general ledger records, and balances all the transactions that affect an organization’s balance sheet and income statement.
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