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Accounting For Managers - Accounting Process

Steps of the accounting process

   Posted On :  25.01.2018 10:59 pm

The following steps are involved in the accounting process:

 1.         The first and the most important part of the accounting process is the analysis of the transactions to decide which account is to be debited and which account is to be credited.

2.         Next comes journalising the transactions i.e. Recording the transactions in the journal.

3.         The journal entries are posted into respective accounts in the ledger and the ledger accounts are balanced.

4.         At the end of the accounting period, a trial balance is prepared to ensure quality of debits and credits.

5.         Adjustment and closing entries are made to enable the preparation of financial statements.

6.         As a last step financial statements are prepared. 

These six steps taken sequentially complete the accounting process

during an accounting period and are repeated in each subsequent period.

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