Procedural Aspects of Accounting
Auto Beauty Business Culture Dieting DIY Events Fashion Finance Food Freelancing Gardening Health Hobbies Home Internet Jobs Law Local Media Men's Health Mobile Nutrition Parenting Pets Pregnancy Products Psychology Real Estate Relationships Science Seniors Sports Technology Travel Wellness Women's Health

Procedural Aspects of Accounting

Procedural aspects of accounting Generating Financial Information 1. Recording - This is the fundamental purpose of accounting. Every business transactions of a financial character, as supported by a number of documents like pass book, sales bill, salary slip etc. are confirmed in the record of account. Recording is done in a book called "Journal." This book may further be divided into several subsidiary books according to the character and volume of the business.

Procedural aspects of accounting

 

Generating Financial Information

1. Recording - This is the fundamental purpose of accounting. Every business transactions of a financial character, as supported by a number of documents like pass book, sales bill, salary slip etc. are confirmed in the record of account. Recording is done in a book called "Journal." This book may further be divided into several subsidiary books according to the character and volume of the business.

2. Classifying – It is related with the methodical examination of the record data, with an outlook to group entries or transactions of one character at one place so as to put information in compact and usable form. The book holding classified data is known as "Ledger". This book holds on dissimilar pages, personal account heads under which, all monetary contracts of related nature are assembled.

3. Summarizing - It is related to the preparation and management of the off the record data in a way helpful to the inner as well as the outer users of financial records. This procedure guides to the research of the following financial records:

(a) Balance Sheet (b) Profit $ Loss A/c (c) Trial Balance (d) cash-flow Statement.

4. Analyzing - The term 'Analysis' means systematic organization of the recorded data provided in the monetary records. The figures given in the financial statements will not help anyone unless they are in a easy form.

5. Interpreting - This is the last function of bookkeeping. It is related with explanation of the significance and meaning of the relationship as verified by the scrutiny of accounting data.

6. Communicating - It is related with the broadcast of recapitulated, analyzed and interpreted data to the final users to allow them to make cogent decisions. This is done by preparation as well as allotment of accounting reports, which contain besides the normal P &L a/c and the balance sheet, extra data in the form of graphs, accounting ratios, diagrams, fund flow statements etc.

The first two procedural stages of the process of generating financial information along with the preparation of trial balance are covered under book-keeping while the preparation of financial statements and its analysis, interpretation and also its communication to the various users are considered as accounting stages.

Looking for payroll, accounting & invoicing? Save when shopping online by using the latet payroll, accounting & invoicing coupons and pay less at popular retailers and brands. Find deals for popular payroll, accounting & invoicing stores using community-sourced coupons and deals.
Need an answer?
Get insightful answers from community-recommended
experts
in Accounting & Finance on Knoji.
Would you recommend this author as an expert in Accounting & Finance?
You have 0 recommendations remaining to grant today.
Comments (0)
ARTICLE DETAILS
RELATED ARTICLES
RELATED CATEGORIES
ARTICLE KEYWORDS