Some of the basic accounting terms that you will learn include revenues, expenses. The following table lists down the steps followed in an accounting process. Basic accounting workshop georgia department of revenue. As a result, there are well organized processes to bring consistency and structure to financial reporting. For example, cash, bank, sales, and purchase related documents.
What was the ending balance for raw material, work in process and finished goods inventory. Accounting cycle refers to the specific tasks involved in completing an accounting process. In this explanation of accounting basics, and throughout all of the free materials and the pro. The accounting cycle is the holistic process of recording and processing all. Accounting basics, part 1 free bookkeeping lessons. As the entries in the journal are made from basic documents like invoices. Accounting process and principles, financial, cost and management accounting unit structure. Basic bookkeeping, page 2 of 3 basic bookkeeping process for each business transaction. Collecting and analyzing accounting documents it is a very important step in which you examine the source documents and analyze them. This is a continuous process throughout the accounting period. Accounting cycle 8 steps in the accounting cycle diagram, guide.
Basic accounting procedures introduction to business. You will become familiar with accounting debits and credits as we show you how to record transactions. The length of an accounting cycle can be monthly, quarterly, halfyearly, or annually. Figure shows the six steps in the accounting cycle.
The process of accounting involves recording classifying and summarizing of past. Basic accounting principles business environment 62 5. Using generally accepted accounting principles, accountants record and. The accounting cycle refers to the process of generating financial statements, beginning with a business transaction and ending with the preparation of the report. Accounting is a system meant for measuring business activities, processing of information into reports and making the findings available to decisionmakers. Some of the basic accounting terms that you will learn include revenues, expenses, assets, liabilities, income statement, balance sheet, and statement of cash flows. Introduction to accounting basics, a story for relating to. It may vary from organization to organization but the process remains the same. Free pdf version accounting basics, part 1 bookkeeping explained.
In the united states, a private sector group called the. The documents, which communicate these findings about the performance of an organisation in monetary terms, are called financial statements. Slides of this presentation can be found at my slideshare page. The steps in the accounting process accountingtools. The basic purpose of cost accounting is to provide a detailed. Accounting system accounting processes scope this chapter is intended to give a basic understanding of accounting theory and how it is applied within the peoplesoft financial accounting system. Accounting 1 chapters 1 to 11 class handouts for professor howard j. The first step in the cycle is to analyze the data collected from many sources. We will address these three parts of the accounting process below.