Review of Accounting Process
Nature of accounting
Accounting is a service activity
Accounting is the language of business
Function of accounting
to provide quantitative information, primarily financial in nature, abouteconomic entities, that is intended to be useful in making economic decision.
to record and report accurately the economic reality of the business.
to test the truthfullness of the financial reports, to trace fraudelenttransactions and to locate and rectify accounting errors.
Identification of events to berecordedJournal entries
are posted to the
ledgerPreparation of the trial balanceAdjusting journalentries are journalizedand ostedClosing journalentries are journalized andpostedPreparation of thepost-closing trial
Preparation of the financialstatementsPreparation of the worksheetincludingadjusting entriesReversing journalentries are journalized andpostedTransactions are
recorded in the