Question

1. So just like with last week what is the flow, order, of doing things in recording accounting related transactions/entries.
Where do we start and then go from there.....

2.From above describe the pieces, if you say General Ledger, well what is that?

Answer 1

Flow Of Accounting from beginning to the end is as follows:

Source Documents-Vouchers-Journal Entries-General Ledger-Trial Balance-Profit & Loss Account- Balance sheet.

Now each Flow is described here:

1. Source Documents: Source documents is the initial stage from where accounting will be started, for example, Bank Statement, etc.

2. Vouchers: We will prepare the Voucher using source documents like Sales Voucher, Purchase Voucher, Contra Voucher, etc.

3.Journal Entries: The next step is to make the journal entries for all vouchers.

4. General Ledger: General ledger is a type of summary of respective heads like Cash, Bank, Debtors/Creditors, Sales, Purchase etc.,

General ledger reflects the balances of each head of transactions like Cash in Hand, Balance with Bank, etc.

5. Trial Balance: The net step is to prepare the trial balance to check the accuracy of the transaction posted from General ledger, here the total of debit side must be equal to the Credit side.

6. Profit & Loss Account: in the next step Profit & loss account is prepared to find out the profit/loss from the business.

7. Balance Sheet: in the next step prepare the Balance sheet to find the position of a business.

After completing the above-mentioned stages Statment od Cash flow, Reporting, etc. will be done, & share the financial statements with all stakeholders.