Tasks Involved in the accounting process

Including the tasks of recording the transactions and posting them into the ledger, these are the tasks that we generally come across and assume to be the tasks involved in accounting.

• Creating a Proof of the Transaction

Whenever a transaction takes place in an organization, more so, in the case of transactions relevant to accounting, a proof is created in the form of either a voucher or a receipt or an invoice or any other document that gives the details relating to the transaction.

Strictly speaking, this task is not a part of the accounting process. It is only a task which would enable the accomplishment of the accounting process or tasks.

Recording

The first accounting task is "Preparing the Journal based on the proof of the transaction". This is called Recording the transaction.

» Posting

The second accounting task is "Preparing the Ledger based on the information in the Journal". This is called Posting the Journal Entry into the Ledger.

» Preparing a Trial Balance

Preparing a trial balance is one other task that we come across in accounting. A trial balance is a statement of ledger account balances as at a particular instance. It can be prepared at any instance as and when needed. It is a statement and not a ledger account.

• Purpose

A Trial Balance is prepared to check the mathematical/arithmetic accuracy of accounting. This is the main and most important purpose of preparation of the Trial Balance and nothing else.

However, since it is anyhow prepared for an important purpose, it is used for other purposes wherever possible. Just because it is being used for other purposes (like in the preparation of final accounts), we cannot say that the trial balance is prepared for those other purposes.

The Ledger gives the information that we need and we cannot prepare a ledger without a journal (No Journal No Ledger). But, we can think of the existence of the accounting system and process without the trial balance

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Purpose of Accounting

The basic purpose of accounting is derivation of information. The double entry system of accounting enables an organisation to derive the information that it needs in relation to accounting elements called account heads or ledger accounts. This double entry system of accounting, enables the collection of all the information relating to an element (account) at a single place.

For example

To know the value of Furniture with the organisation a "Furniture a/c" is maintained.
To know the amount of expenditure incurred on account of salaries a "Salaries a/c" is maintained.

The organisation's informational need defines the elements in the accounting system of the organisation. The more the information needed by the organisation the more the elements (accounting heads) that are to be maintained by the organisations'

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accounting activity

Final

Meaning
Occurring at or forming an end or termination
Conclusive in a process or progression
Synonyms
last, concluding, finishing, closing, ending

» Final Accounts/Accounting
In its simplest sense, final accounts/accounting should be understood as the accounting activity that is carried on generally towards the end of a period called accounting period.

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