Balance Sheet and Financial Transactions
1. “Accounting is ingrained in our society and it is vital to our economic system.” Do you agree? Explain.
I agree because I think Accounting is part of our economic system specifically in business and we all know that in order to maintain the competitiveness of our economic system all over the world is to uplift the business society that’s why Accounting is vital to our economic system.
2. Identify and describe the steps in the accounting process. 1. Identifying the financial transaction a business may perform several transactions. Of which, only financial transactions are recorded in accounts. In the first step of the accounting process, therefore, financial transactions are identified. Financial transactions are those which are expressed in monetary terms. 2. Recording of Financial Transactions
In the second step of accounting process, all financial transactions performed by the business are systematically recorded in the journal, and subsidiary books.
3. Classifying Financial Transactions
In the third step of accounting process, financial transactions are classified mainly into the transaction related with persons that include enterprises, persons, assets and income-expenses. Then, they are recorded in their respective ledger accounts, such as debtors' and creditors' accounts, land and building accounts; commission received accounts, and rent account.
4. Summarizing Financial Transactions all financial transactions are summarized in this step of accounting process. They are summarized by preparing a trial balance. Preparation of trial balance helps to prepare final accounts which disclose the profit and loss and financial position.
5. Communicating the Results Of Business
In the last step of accounting process, the results of business operations such as profit or loss and the company's financial position are communicated to the users. Those users include owners, creditors and managers who need financial information for
I agree because I think Accounting is part of our economic system specifically in business and we all know that in order to maintain the competitiveness of our economic system all over the world is to uplift the business society that’s why Accounting is vital to our economic system.
2. Identify and describe the steps in the accounting process. 1. Identifying the financial transaction a business may perform several transactions. Of which, only financial transactions are recorded in accounts. In the first step of the accounting process, therefore, financial transactions are identified. Financial transactions are those which are expressed in monetary terms. 2. Recording of Financial Transactions
In the second step of accounting process, all financial transactions performed by the business are systematically recorded in the journal, and subsidiary books.
3. Classifying Financial Transactions
In the third step of accounting process, financial transactions are classified mainly into the transaction related with persons that include enterprises, persons, assets and income-expenses. Then, they are recorded in their respective ledger accounts, such as debtors' and creditors' accounts, land and building accounts; commission received accounts, and rent account.
4. Summarizing Financial Transactions all financial transactions are summarized in this step of accounting process. They are summarized by preparing a trial balance. Preparation of trial balance helps to prepare final accounts which disclose the profit and loss and financial position.
5. Communicating the Results Of Business
In the last step of accounting process, the results of business operations such as profit or loss and the company's financial position are communicated to the users. Those users include owners, creditors and managers who need financial information for