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The steps in the accounting earch
process Value Packs
Controller Lirar Value Pack
Novemer 29, 2017
CFO Lirar Value Pack
ookkeeper Lirar Value Pack
The accounting process is three separate tpes of transactions used
Financial Analsis Value Pack
to record usiness transactions in the accounting records. This
information is then aggregated into financial statements. The Accounting estsellers
transaction tpes are: Accountants' Guideook
Accounting Controls Guideook
Accounting for Casinos & Gaming
1. The first transaction tpe is to ensure that reversing entries from
Accounting for Inventor
the previous period have, in fact, een reversed.
Accounting for Managers
2. The second group is comprised of the steps needed to record Accounting Procedures Guideook
individual usiness transactions in the accounting records. Agricultural Accounting
ookkeeping Guideook
3. The third group is the period-end processing required to close
udgeting
the ooks and produce financial statements.
CFO Guideook
Closing the ooks
We will address these three parts of the accounting process elow. Construction Accounting
Cost Accounting Fundamentals
Cost Accounting Textook
eginning of Period Processing
Credit & Collections
Fixed Asset Accounting
Verif that all transactions designated as reversing entries in
Fraud xamination
preceding periods have actuall een reversed. Doing so ensures that GAAP Guideook
Governmental Accounting
transactions are not recorded twice in the current period. These Health Care Accounting
Hospitalit Accounting
transactions are usuall flagged as eing reversing entries in the
IFR Guideook
accounting software, so the reversal should e automatic.
Lean Accounting Guideook
Nonetheless, examine the accounts at the eginning of the period to
New Controller Guideook
verif the reversals. If a reversing flag was not set, an entr must e Nonprofit Accounting
reversed manuall, using a new journal entr. Paales Management
Paroll Management
Pulic Compan Accounting
Individual Transactions
Real state Accounting
mall Audit Practice et
The steps required for individual transactions in the accounting
process are: Finance estsellers
usiness Ratios Guideook
Corporate Cash Management
1. Identif the transaction. First, determine what kind of transaction
Corporate Finance
it ma e. xamples are uing goods from suppliers, selling
Cost Management
products to customers, paing emploees, and recording the
nterprise Risk Management
receipt of cash from customers. Financial Analsis
2. Prepare document. There is frequentl a usiness document to Interpretation of Financials
Investor Relations Guideook
e prepared or recognized to initiate the transaction, such as an
MA Guideook
invoice to a customer or an invoice from a supplier.
Mergers & Acquisitions
3. Identif accounts. ver usiness transaction is recorded in an
Treasurer's Guideook
account in the accounting dataase, such as a revenue,
expense, asset, liailit, or stockholders' equit account. Identif Operations estsellers
which accounts are to e used to record the transaction. Constraint Management
Human Resources Guideook
4. Record the transaction. nter the transaction in the accounting
Inventor Management
sstem. This is done either with a journal entr or an on-line
Project Management
standard transaction form (such as is used to record cash
Purchasing Guideook
receipts against open accounts receivale). In the latter case,
the transaction forms record information in a pre-determined set
end us our e-mail address
of accounts (which can e overridden).
to receive monthl course
discounts *
These four steps are the part of the accounting process used to
record individual usiness transactions in the accounting records.
Period-nd Processing
UMIT
The remaining steps in the accounting process are used to aggregate
all of the information created in the preceding steps, and present it in
the format of financial statements. The steps are:
1. Prepare trial alance. The trial alance is a listing of the ending
alances in ever account. The total of all the deits in the trial
alance should equal the total of all the credits; if not, there was
an error in the entr of the original transactions that must e
researched and corrected.
2. Adjust the trial alance. It ma e necessar to adjust the trial
alance, either to correct errors or to create allowances of
various kinds, or to accrue for revenues or expenses in the
period.
3. Prepare adjusted trial alance. This is the original trial alance,
plus or minus all adjustments susequentl made.
4. Prepare financial statements. Create the financial statements
from the adjusted trial alance. The asset, liailit, and
shareholders' equit line items form the alance sheet, while the
revenue expense line items form the income statement.
5. Close the period. This involves shifting the alances in the
revenue and expense accounts into the retained earnings
account, leaving them empt and read to receive transactions
for the next accounting period.
6. Prepare a post-closing trial alance. This version of the trial
alance should have zero account alances for all revenue and
expense accounts.
In realit, an accounting software package will automaticall create
all versions of the trial alance and the financial statements, so the
actual steps in the accounting process ma e consideral reduced.
Instead, the steps used in a computerized environment are likel to
e:
1. Prepare financial statements. This information is automaticall
compiled from the general ledger the accounting software.
2. Close the period. The accounting staff closes the accounting
period that has just een completed, and opens the new
accounting period. Doing so prevents current-period
transactions from eing inadvertentl entered into the prior
accounting period. In a multi-division compan, it ma e
necessar to complete this period closing step in the software
for each susidiar.
imilar Terms
The accounting process is also known as the accounting ccle.
Related Courses
ookkeeper ducation undle
ookkeeping Guideook
Closing the ooks
ookkeeping
Defensive interval ratio Dividends definition
Copright 2018