Types of Accounting: An Overview For Designers



Accounting is used for quantitative information of finances. But what is the accounting process and what's best for your design practice? Read on to find out.


Nor every company has an accounts department that looks after the accounting details of the company but accounting is important. An accounting department is the backbone of every business. It records all the business transactions and keeps a track of the incomes and expenses of the business. The business depends on these incomes for its profits and should know all the expenses that are incurred to keep it going. They also determine the correct financial position and financial standing of the business. All this makes the recording of transactions important. For the systematic and accurate recording of the transactions, accounting is important. For accurate accounting of transactions, an accounting process is essential. Let us understand the accounting process in detail.


The accountant should know the accounting process well so that there is no confusion in recording the transactions. Following the correct accounting process is mandatory as per accounting ethics and it also helps to understand and communicate the financial operations of your design firm. The following paragraphs are devoted to complete understanding of the accounting process.



Accounting Process Definition

The purpose of accounting is recording all the transactions honestly and accurately in the books of accounts. The accounting process is the method followed by the accountants to record the transactions. The accounting process can be defined as "the process that begins when the transaction takes place and ends when the transaction is recorded in the books of accounts". It is a series of procedures that are used to analyze and record the business transactions for a particular period of time.



The Accounting Process

The accounting process, also known as the accounting cycle process, includes the below mentioned steps. In order to follow these steps, you will need to know all the accounting principles and concepts well.

•The first step involves identifying the transaction and finding the source documents of the transaction.

•Analyze which accounts is the transaction affecting and what is the amount of the transaction.

•Record the entry into the journal as a credit or debit, according to its nature.

•Transfer the journal entries into the appropriate accounts in the ledger.

•A trial balance is then created which sees to it that the debit amount equals the credit amounts.

•Correct the discrepancies in the trail balance and balance the debit side with the credit side.

•Make adjusting entries in order to record the accrued and deferred amounts.

•Next, prepare the adjusted trial balance on the basis of the deferred amounts.

•Prepare the financial statements like the income statements, the balance sheet, retained earnings statements and finally the cash flow statements.

•Close the temporary accounts like revenues, expenses, gains, etc. by closing journal entries. These accounts are transferred to the income summary account and later posted into the capital accounts.

•Prepare the final trial balance on the basis of the closing journal entries.

There can be a slight alteration to the above accounting process flow. The financial statements can be made before the adjusting entries. Also, some companies add another step after the final trial balance. This step is called as reversing entries step. Reversing entries is done if an accrual or deferral entry was recorded earlier and needs to be adjusted to avoid a double entry. It is recorded on the first day of a new recording period. All the accountants follow the same accounting process sequence, except for the reversing entries. That is an optional step which may or may not be followed.


By Deeptee A



5 comments:

  1. I really loved reading your blog. It was very well authored and easy to understand. You can also read more about capital accounts colletion agency, just Click Here.

    ReplyDelete
  2. The near future will bring us new colorways of adidas’ newest Tubular model, the Tubular Instinct. Adidas Originals is already killing it with silhouettes like the NMD, but they like to offer different options for Adidas Shoes their fans.This new version of the Tubular comes with a high top construction and a full suede upper. Knitted/woven detailing then lands on the heel ultra boost uncaged while a semi translucent midsole/outsole keeps that Tubular spirit alive. Two of the newest color options include navy and tan/orange with contrasting midsoles and milky Yeezy Shoes white outsoles. What are your thoughts so far on the adidas Tubular Instinct? Hot or not? Look for both of these colorways to arrive at Adidas NMD Human Race retailers real soon.
    Fans of “all-Red” everything sneakers will be happy to see that adidas has decided to release this brand new colorway of the adidas nmd for sale adidas Tubular Invader. Coming in monochromatic fashion, let’s take a first look at the shoe,Constructed out of suede and synthetic, the adidas Tubular Invader comes Adidas ZX Flux in an all-Red aesthetic from head to toe. This includes the pyramid design on the mid-foot strap and overlay, as well as all most of Adidas Store the branding, sole unit, laces and lining. Said to be releasing in a few weeks, is this colorway of the Tubular Invader one that you’re Adidas Outlet looking forward to? Let us know in the comments below.
    Derrick Rose’s 7th signature shoe with adidas will release next week on August 11th as adidas superstar 2 the former NBA MVP will be suiting up for a team other than the Chicago Bulls for the first time in his career.Earlier this Summer Adidas Yeezy D Rose was traded to the New York Knicks where he hopes to revitalize his career by teaming up with Carmelo Anthony, Kristaps Porzingis, and adidas stan smith former Bull Joakim Noah.

    ReplyDelete
  3. for beginners like me need a lot of reading and searching for information on various blogs. and articles that you share a very nice and inspires me .
    cara menggugurkan kandungan
    obat aborsi
    kalkulator kehamilan

    ReplyDelete
  4. By reading this article many benefits that we can learn. thank you for sharing your insights to us all .

    ReplyDelete