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The purpose of this paper is to provide the user with the necessary instinct about thewhole accounting process, the steps involved, final deliverables etc. Accounting is the art ofrecording, classifying and summarizing in a significant manner and in term of money,transaction and event, which are, in part at least, of financial character, and interpreting the resultthereof. Thus business owner can take important decision with the help of the informationprovided by accounting data. Accounting Cycle starts with the recording of business transaction in the Journal orsubsidiary books and after passing through the Ledger and Trial Balance it results in preparationof Final Accounts (i.e., Income Statement and Balance Sheet). Entries in Journal: Journal is the book of original entry. Transactions are date wiserecorded in this book and due effect is given to the double entry system.Posting in Ledger: Ledger is a book which contains all accounts of the business whetherPersonal, Real or Nominal. All the transactions entered in the Journal are later transferredto the Ledger. As such, Ledger is also called a book of final entry. In Ledger alltransactions are recorded in analytical order, i.e. all transactions pertaining to a particularaccount are contained at one place in the Ledger. Preparation of Trial Balance: Accuracy of Ledger accounts is tested by preparing aTrial Balance. Trial Balance is the list of debit and credit balances taken out from ledger.If the total of the debit side of Trial Balance is equal to that of its credit side, it ispresumed that the posting to the ledger is accurate. Preparation of Final Accounts (Financial Statements): They provide a summary of theaccounts of a business enterprise, the Balance Sheet reflecting the assets, liabilities and
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