Accounting Process

1
Accounting Process
Financial Transactions or events
Communication to the users

• Journal
• Cash book
• Purchases book
• Sales book
• Purchases returns book
• Sales returns book
• Bills Payable book
• Bills receivable book
• Journal Proper

Recording
Analysis and Interpretation
Summarising as Trial balance etc
Classifying (Posting into Ledger)
2
Explanation

• Financial Transaction or Events Are concerned
  to financial accounting and it is an art
  of recording financial transactions,
  summarizing and interpreting them and
  communicating the results to users. It
  ascertains profit earned or loss suffered
  during a period and the financial position
  on the date when the
  accounting period ends,
• Communicating to the users Finally, the
  accounting function involves communicating
  the financial data to the users.

3
Analysis and interpretation

• The final stage in the accounting is
  analyzing and interpreting the financial
  data contained in the final accounts so that
  parties concerned with the business can
  make a meaningful judgment about the
  profitability and financial position of the
  business unit .

4
JOURNAL

• Cash book To record receipts and payment
  of cash , including receipts into and
  payment out of the bank.
• Purchase book To record credit purchase of
  goods dealt in or of the materials and
  stores required in the factory.
• Sales book To record the credit sales of
  goods dealt in by the firm.
• Purchases returns book to record the
  returns of credit sales made by customers.

5
Sales return book

• Sales return inwards book is maintained to
  record the goods or material returned by
  the purchaser that had been sold on credit.

6
BILLS PAYABLE BOOK

• The purchaser of goods gives his acceptance to
  the seller. The acceptance so given is the bill
  payable for him. Similarly, a promissory not made
  by him is also a bill payable. Bills payables are
  recorded in a book called the bills payable book.

7
BILLS RECEIVABLE BOOK

• The seller of goods usually desires to have a
  written commitment from his debtors as to the
  date of payment. He also likes to have such a
  document which he can get discounted from a bank,
  in case of need.

8
JOURNAL PROPER

• Journal proper is used for making the original
  record for those transactions which do not find a
  place in any other subsidiary book such as cash
  book, purchase day book etc.l

9
RECORDING

• Accounting is an art of recording business
  transactions in the books of accounts recording
  is the process of entering business transactions
  financial character in the book of original entry.

10
CLASSIFICATION

• Classification is the process of grouping
  transactions or entries of one nature at one
  place. The transactions recorded in the Journal
  or the subsidiary books are classified and posted
  to the main book of accounts heads under which
  all financial transaction of a similar nature are
  collected.

11
SUMMARISING

• This involves presenting the classified data in a
  manner which is understandable and useful to
  internal as well as excretal end users of
  accounting statements.