What is the Accounting Process?
The accounting process is an organised way to record financial transactions.
Accounting is just an organised financial system to record the financial transactions.
The modern accounting system was developed by an Italian mathematician called Luca Pavoli in the late 1400’s. This is what we call accrual or double entry accounting.
The journal dictates how financial transactions are classified and recorded in the ledger in debit and credits.
Ledger accounts are a list of financial transactions of similar types.
The trial balance is a list of ledger account balances, showing the debit balances are equal to the credit balances.
Finally these financial reports come from ledger account balances:
This system, sometimes called ‘Double Entry Accounting‘ revolves around debits and credits. Because of the double entry, there are checks and balances every time a financial transaction is recorded.
Because of all these complications, learning accounting is like learning a foreign language!
However, the good thing is accounting is logical. So if you learn the logic well, the rest of your studies will be easier to understand.
Now to learn more take this Introductory Accounting Tutorial Course. This course will show you examples how to post journals to ledgers and prepare a trial balance. Accounting Processes Tutorial Course
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