Accounting ProcessFinancial Transactions or events

Recording

Communication to the users

Analysis and Interpretation

Summarising as Trial balance etc

Classifying (Posting into Ledger)

Journal

1. Cash book

2. Purchases book

3. Sales book

4. Purchases returns book

5. Sales returns book

6. Bills Payable book

7. Bills receivable book

8. Journal Proper

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

Communicating to the users : Communicating to the users : Finally, the Finally, the accounting function involves communicating the accounting function involves communicating the financial data to the users.financial data to the users.

ExplanationExplanation

Analysis and Analysis and interpretationinterpretation The final stage in the accounting is The final stage in the accounting is

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

JOURNALJOURNAL

Cash book: Cash book: To record receipts and payment of To record receipts and payment of cash , including receipts into and payment out of cash , including receipts into and payment out of the bank.the bank.

Purchase book: To record credit purchase of goods Purchase book: To record credit purchase of goods dealt in or of the materials and stores required in dealt in or of the materials and stores required in the factory.the factory.

Sales book: To record the credit sales of goods Sales book: To record the credit sales of goods dealt in by the firm.dealt in by the firm.

Purchases returns book: to record the returns of Purchases returns book: to record the returns of credit sales made by customers.credit sales made by customers.

Sales return bookSales return book

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

BILLS PAYABLE BOOKBILLS PAYABLE BOOK

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

BILLS RECEIVABLE BOOKBILLS RECEIVABLE BOOK

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

JOURNAL PROPERJOURNAL PROPER

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

RECORDINGRECORDING

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

CLASSIFICATIONCLASSIFICATION

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

SUMMARISINGSUMMARISING

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