What is accounting process?

What Does accounting process Mean

The accounting is the discipline dedicated to collecting, interpreting and displaying information related to the assets and economic resources of an entity. To fulfill its purpose, experts in the field (called accountants ) must develop a logical sequence of steps that are interrelated and that make up what is known as the accounting process .

Many are the studies and publications that establish which are the stages that should give shape to the aforementioned accounting process. Thus, for example, one determines that its phases are as follows:

-Record operations in the journal.

-Use the ledger.

-Commit the trial balance.

-Carry out what are the adjustments and the pertinent corrections that were necessary.

-Create the worksheet.

-Prepare the financial statements.

-Acommit the closing seats.

However, there are experts in the field who determine that the cycle itself is made up of three clearly differentiated parts:

-The opening. As its name suggests, it is the process in which the opening of the accounting books is carried out, either by the start of a business activity or by the continuation of the work of a company that has been operating a weather. At the same time, within this period, two activities are developed: the inventory and the opening of the accounting.

-The management. In this case, the stage is the one that takes place throughout the development of the annual financial year and during it both the accounting record of the different operations and their interpretation are undertaken.

-The conclusion. As you can imagine from its name, in this phase the accounts are adjusted, the necessary modifications are introduced and a synthesis is established, which is made available to all interested parties.
An accounting process begins with the opening of a book or record . There the patrimonial status of the organization in question must be detailed, detailing its assets and its obligations. This beginning of the accounting process can take place at the time a company begins its activity or at the beginning of an accounting year.
During the accounting year, said book must compile all the economic operations of the company (purchases of materials, sales of products , payment of debts, etc.), together with the documents that guarantee each operation.
Finally, before the accounting process is closed, adjustments or modifications can be made that allow a reliable balance to be reached at the end of the year. With the accounting process completed, the financial status of the company is available to those who have the right to access that information.
The closing of the accounting process always implies the cancellation of the accounts of the credit (income and benefits) and the debit (expenses and losses). The accounting is closed once the various accounts of the company are already settled.

The balance of the accounts , in short, provides information on the assets and results of the company's financial year, data that are of great importance for shareholders and tax authorities.

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