Question

Mr. Shil Wants to record the financial transactions of his newly started business. Discuss what accounting steps/stages he need to adhere so that the transactions can be duly recorded and processed in order to prepare the financial statements.

Answer 1

Answer:Examine transactions by analysing the source document.

Recordstransactions in the journal.

Post record entries to the ledger account.

Complete the worksheet by preparing the account balance

Prepare the financial statement

Record and post the adjusting entry

Record and post the closing entry

Prepare the final balance sheet

Explanation:

Answer 2

Discussion about recording to Analysis process

Explanation:

First of all collect hand to hand Receipt of Transactions

then come to accounting Part

we divide accounting entry in many part to understand easily

Accounting is an art of Recording means we can record the Transaction on available 2 places

First is Journal and Second is Subsidiary Books

Journal is a Normal Recording System in Accounting all Accountant use this way but when the volume of transaction is  large and Quantitative Information is also necessary we use Subsidiary books. some examples of subsidiary books are cash book, Purchase book, Sale book, Purchase Book, Sale Return Book, Purchase Return book

Let us go ahead

Accounting is an art of Recording then Classifying(now we discussed Classifying )

Classifying : Transaction are second time record here so it is called

Secondary books.  Under Classifying we make ledgers , Ledgers are Individual Account of different transaction for example  Cash Account, Capital Account, Bank Account, Sale Account  etc.

Accounting is an art of Recording, Classifying and summarizing

(now we discussed summarizing )

summarizing means make summary of all Ledger balance (ledger we discussed above) as on Particular period and this summary is called Trial Balance , now by using this trial balance divide it into 2 part

First for profit called Profit Statement and other position part is called position statement

In normal Language Profit Statement is called Trading, Profit & Loss A/C

and Position Statement is called Balance Sheet

we say financial Statements to the combination of

1. Trading A/C

2. Profit & Loss A/C

3. Balance Sheet

Accounting is the art of recording, classifying and summarizing in a significant manner and in terms of money means we record only financial character and finally we interpret/Analysis  through another tool name

cash flow statement and Ratio

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