Businesses go through a series of financial transactions that occur on a continuous basis within an accounting period. This sequence of transactions is referred to as an operating cycle and it goes like this: At the beginning of the period, the entity has a certain amount of cash This cash is used to purchase supplies … Continue reading Accrual Accounting and Adjusting Entries
Tag: bookkeeping
Accounting Trial Balance Example and Financial Statement Preparation
The last two steps in the accounting process are preparing a trial balance and then preparing the balance sheet and income statement. This information is provided in order to communicate the financial position of the entity to interested parties. TRIAL BALANCE A trial balance is a list and total of all the debit and credit … Continue reading Accounting Trial Balance Example and Financial Statement Preparation
Record Keeping and the Accounting Process
Accounting is a process-oriented task that follows a prescribed series of steps in order to keep track of, and record, the balances of the various accounts. When a business makes a transaction, the effect of that transaction is recorded in the accounting system. According to the fundamental accounting equation, each transaction will affect at least … Continue reading Record Keeping and the Accounting Process
