Stages of Accounting | Accounting Cycle Steps | How Many Stages?

Stages of Accounting: As per this meaning, accounting is merely an art of record keeping. The procedure of accounting starts by very first identifying the events and transactions which are of financial character and then be tape-recorded in the books of account.

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Every excellent record keeping system includes suitable classification of transactions and events as well as their summarisation for all set referral. After the transactions and events are taped, they are transferred to secondary books i.e. Journal. In ledger, transactions and events are classified in terms of earnings, expense, properties and liabilities according to their qualities and summarised in revenue and loss account and balance sheet.

Essentially the deals and occasions are to be measured in terms of money. Measurement in regards to money means measuring at the judgment currency of a nation, for example, rupee in India, dollar in U.S.A. and like. The transactions and occasions need to have at least in part, monetary attributes. The inauguration of a brand-new branch of a bank is an event without having financial character, while business disposed of by the branch is an event having financial character. Accounting likewise interprets the recorded, categorized and summed up deals and occasions.

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Stages of Accounting

Phases of accounting procedure consist of journalising transactions, ledger posting, balancing journal; preparing trial balance, earnings and loss account and balance sheet.

A Journal is a book of accounts in which all daily deals are tape-recorded in the order of their occurrence. In big business home, a journal is categorized into various unique journals which tape transactions of similar and repeated nature. All those transactions which occur occasionally or do not find a place in any of the special journals are recorded in the Journal proper.

Accounting has the following stages:

( i) The deals of a company that have, a minimum of in part, a financial character are determined and tape-recorded.

( ii) The recording is carried out in a way which recognizes the different classes and kinds of transactions.

( iii) The resulting records are summed up in such a way that the owners or other interested parties in the service can see the overall results of all the deals.

Accounting Cycle Steps

  • Determining and Analyzing Organization Deals.
  • Recording in the Journals.
  • Posting to the Journal.
  • Unadjusted Trial Balance.
  • Adjusting Entries.
  • Adjusted Trial Balance.
  • Financial Statements.
  • Closing Entries.
  • Post-Closing Trial Balance
  • Reversing Entries

Advised Articles

  • Kinds Of Coupons
  • Kinds Of Lease
  • Scope of Accounting
  • Fundamental Concepts of Accounting
  • CA Final Admit Card
  • CA Final RTP
  • Pan Card Status
  • Earnings Tax Slab Rates
  • Sub Fields of Accounting
  • Principles of Accounting
  • Definition of Accounting

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