2.2: The Accounting Process
Read each section on this page. You have been exposed to the concepts of recording and journalizing transactions previously, but this explains the rest of the accounting process. The accounting cycle is the repetitive set of steps that must occur in every business every period in order to meet reporting requirements.
This article will give you an introduction to the principles of accounting transactions. Accounting transactions record the amount of money spent and received by a given entity. Take notes while you read.
This video takes you through journal entries and posting to T accounts, and is a continuation of the accounting cycle. Sometimes, it's easier to "see" accounting in action rather than just read about it.
This video takes you deeper into the accounting cycle and walks through how to post transactions to the journal at T accounts.
This video discusses adjusting entries, which you will need to do to get your worksheet ready for the preparation of the financial statements.
This chapter explains the importance of using an accounting system, which will be especially important if you are interested in becoming an auditor.
Watch these short videos on the accounting cycle. If you need to, rewatch the videos for Steps 1 through 4 before you begin. These videos go through the entire accounting cycle: journals, postings, worksheets, adjusting entries, post-closing entries, and financial statements. You will see the process as one continuous activity. The method is slightly different between sole proprietorship companies and corporations. Learn both, since over the course of your career you may find yourself in both types of organization.