The following are the stages of the correct accounting process:

The accounting field has a very important role to be able to track the sustainability of a company or business. This is presumably because accounting has the main objective to provide information that can be used to make important decisions in order to maximize the efficiency of business operations. I try to explain The following stages of the correct accounting process are: as below.

To obtain the necessary information, an accountant will usually perform several operations. Accountants have the task of collecting and processing data systematically over a certain period of time. Usually the series is made within a year.

The following stages of the correct accounting process are:

Well, the following stages of the correct accounting process are as follows:

Process accountancy or accounting cycle is the activity of collecting and processing data in a period. In other words, the accounting cycle can be understood as the process of preparing financial statements. Of course, these financial statements must be detailed and accountable.

Despite playing an important role, many companies, especially small and medium-sized enterprises decided to make a cycle accountancy. In fact, it is not enough just to recognize the usual financial flows to be able to make business decisions that can help grow the business. Before that, for those of you who want to make an accounting cycle, pay attention to the following important steps.

The following stages of the correct accounting process are:

1. Transaction identification

When creating an accounting cycle, the first thing to do is to collect all the transactions that existed in a given period. You need multiple sources of transaction documents such as invoices, receipts, cash receipts, etc.

Make sure you have all the financial documents within the allotted time. That way, the financial cycle report will be more detailed and accountable.

2. Transferring the contents of the Accounting Transaction Diary to the Ledger

Journal of accounting transactions is a summary and recording of transactions made by a company or business. Usually the container for recording and summarizing is called a journal.

When transferring journal entries to the general ledger, they must match the type of transaction as well as the approximate name of each transaction. The act of transferring records from a journal to a general ledger is also commonly referred to as poses.

Further, the general ledger contains a set of accounting accounts for a particular asset or the assets of all the companies involved. Thus, the accounting reports in the general ledger can be integrated and have a more complete and detailed explanation.

3. Prepare

Trial Balance A trial balance is a collection of active accounts and their balance values. The contents of the trial balance serve as evidence that debtors and credits are the same and are not biased.

When creating a trial balance simply copy the balance values of each account to the general ledger. Although it is relatively easy, you need to calculate the balance in the general ledger so that the trial balance can be made easier and less error-prone.

4. Create custom logs andprocessin the ledger

If there is an error in the log , You will need to create an adjustment log. Adjustments must also be made to ensure that all expenses and income are recorded in the correct period or periods.

In general, there are several bullet points or entries in the customization section. The first paragraph in the throttling log is to correct errors in the logging process. Then you must also record the depreciation of the fixed assets.

You'll also need to be aware of any prepaid rent adjustments or down payments that change rental costs. Usually this change is indicated by benefits that have been used or exceeded.

The next entry in the adjustment log is equipment converted into equipment costs. This change is usually due to the device being used.

In addition, you should also check the income earned initially, then eliminated as service or employment income. You can take this survey by adjusting the product or service being sold.

You keep writing this setup log until all the bugs or things you want to make sure have been reviewed. That way you can post error-free adjustment entries in the general ledger.

5. Rearrange the trial balance adjustment entries

After making adjustments, you must also adjust the contents of the trial balance. This is because the adjusted trial balance serves as the primary data source for financial reporting.

When an adjustment is made to an entry in the adjusting journal, the adjusting account is bound to change in value. Therefore, the value of the balance on the trial balance must be readjusted with the appropriate data in the adjustment log.

No need to be complicated, balance sheet adjustments can be added or subtracted directly by the amount or nominal in the account in question. That way, the balance value on the trial balance becomes more accurate.

6. Prepare financial statements according to the information in the adjusted trial balance

When compiling financial statements, you must fill in various explanations such as income statements, changes in capital and also a balance sheet. At this stage of the financial statements, you must transfer the account information on the adjusted trial balance to the financial statements. You should also adapt the footnotes to the format of the financial statements.

In the notes to the balance sheet, you must fill in the financial position of the business or company. Starting from assets, liabilities, to capital in the accounting cycle period, you must record them in detail and completely. Creating a balance sheet is also quite simple because you only need to record balance data and make adjustments to the balance according to the sections on the balance sheet.

For the income statement, you write down the calculation of the company's income and expenses. You have to record and count all the money that goes into the company and deduct it along with the expenses in the process to get the revenue. In other words, you must subtract the income received by the cost of capital incurred to obtain it.

For a capital change report, it is necessary to indicate the change in the place of capital in your company or business. Changes in capital can occur as a result of additional capital or privatization that is a decrease in investment from the owner of venture capital or the company.

Next, you can add the resulting capital change with profit or loss to the income statement. That way, you can find out the nominal capital of the company for the accounting period.

The last two points in the financial statements are the cash flow statement and the notes to the financial statements. For a cash flow or cash flow statement, you can show the company's cash inflows and outflows. You can record cash flows based on investing, financing, and operating activities during the accounting cycle.

The notes to the financial statements contain additional, more detailed information about certain accounts. The purpose of recording these financial statements is to make it easier to understand the comprehensive value of the financial statements of a business or company.

So, if there are things that are not easy to understand, you can explain them in the notes to the financial statements.

7. Prepare and record closing entries in the General Ledger

This involves closing information on all accounts with the income statement and also reporting changes in capital. The purpose of making closing entries is to avoid the risk of having to recalculate in the next accounting period. As a result, the closing entries close the accounts for changes in capital, income, and expenses.

8. Make a trial balance after closing

The purpose of a trial balance at the end of the period is to balance account information or balance. In this way, accounting operations can be started in the next cycle without the potential for fatal errors. The preparation of the final balance is done by recording the accounts that still have a balance after being closed.

9. Preparation and

recording reversal journals in the general ledger The preparation and recording of reversal diaries in the general ledger is the last step in the accounting cycle reporting process and is usually performed at the beginning of the financial cycle of a new accounting period. You can also decide not to make a reverse entry if you feel it is not needed in the accounting period report for a certain period of time.

The purpose of reverse logging is to simplify the way transactions are recorded. Usually, a reversal entry should be made if there is a record of recurring transactions in the next accounting period. This is why creating and publishing a reverse journal is optional.

Accounting cycle reports make your company's operations more efficient

By having an accounting cycle report, you can study your company's financial flow. Both the accounting cycle for trading companies, the accounting cycle for service companies and the accounting cycle for manufacturing companies.

This is what makes the accounting cycle necessary for company owners or business actors.

Decision making about the company's business or operations also becomes more accurate by looking at the accounting cycle reports. So, so that your company or business develops better, don't hesitate to make an accounting cycle report.

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