Question

Sub:Financial Accounting and analysis
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

Mr. Shils have to do following eight steps of accounting process:

1. Analyze transactions by examining source documents.
2. Journalize transactions in the journal.
3. Post journal entries to the accounts in the ledger.
4. Prepare a trial balance of the accounts and complete the worksheet (includes adjusting entries).
5. Prepare financial statements.
6. Journalize and post adjusting entries.
7. Journalize and post closing entries.
8. Prepare a post-closing trial balance.