Bookkeeping is a critical accounting activity that provides the solid financial foundation on which an organization stands. The correctness and integrity of the financial statements that an organization produces largely depend on the correctness and integrity of its bookkeeping activities. Entry of Journals and review and posting to ledgers are the two core bookkeeping activities. The journals are where all transactions are first recorded on a daily basis. Information from a journal is then posted to the ledgers to update each account. Various accounts in the ledgers are then summarized, tested, and validated, and used for producing financial statements at the end of an accounting period.
Here we will help you understand the basic accounting concepts and expose you to the general ledger process of entry of journals, review, posting summarization, reconciliation and finally reporting and closing of an accounting period. This section from TechnoFunc will help you understand the fundamentals of an effective automated general ledger system and subsequently explain all the important GL concepts including how to analyze a transaction, record it in the appropriate journal, and then post it to the ledgers. We assure you this is the best place to learn the record to report process!!
Typically, the accounts of the general ledger are sorted into five categories within a chart of accounts. Double-entry accounting uses five and only five account types to record all the transactions that can possibly be recorded in any accounting system. These five accounts are the basis for any accounting system, whether it is a manual or an automated accounting system. These five categories are assets, liabilities, owner's equity, revenue, and expenses.
Funds contributed by owners in any business are different from all other types of funds. Equity is the residual value of the business enterprise that belongs to the owners or shareholders. The funds contributed by outsiders other than owners that are payable to them in the future. Liabilities are generally classified as Short Term (Current) and Long Term Liabilities. Current liabilities are debts payable within one year.
Modern business organizations operate globally and leverage a large number of registered legal entities, and operate through complex matrix relationships. To stay competitive in the current global business environment, they must often develop highly diverse and complex organizational structures that cross international borders. Learn more about Legal Entities and their importance for businesses.
Modern automated general ledger systems provide detailed and powerful support for financial reporting and budgeting and can report against multiple legal entities from the single system. These systems offer many advanced functionalities right from journal capture to advanced reporting. This article will provide an overview of some advanced features available in today's General Ledgers.
One of the greatest benefits of using a double-entry accounting system is the capability to generate a trial balance. What do we mean by trial balance? As the name suggests a trial balance is a report that must have its debits equals to credits. Understand the importance of trial balance and why it is balanced. Learn how it is prepared and in which format.
In this article we will focus on and understand the accounting process which enables the accounting system to provide the necessary information to business stakeholders. We will deep dive into each of the steps of accounting and will understand how to identify accounting transactions and the process for recording accounting information and transactions.
Learn the typical accounting cycle that takes place in an automated accounting system. We will understand the perquisites for commencing the accounting cycle and the series of steps required to record transactions and convert them into financial reports. This accounting cycle is the standard repetitive process that is undertaken to record and report accounting.
In this article we will help you understand the double-entry accounting system and state the accounting equation and define each element of the equation. Then we will describe and illustrate how business transactions can be recorded in terms of the resulting change in the elements of the accounting equation.
© 2023 TechnoFunc, All Rights Reserved