Question

Could you please elaborate on the steps involved in the accounting process and provide a detailed description for each?

Answer 1

Accounting is the process of identifying, recording, and communicating the economic events of an organization to interested users of the information. The first step of the accounting process is therefore to identify economic events that are relevant to a particular business. Once identified and measured, the events are recorded to provide a history of the financial activities of the organization. Recording consists of keeping a chronological diary of these measured events in an orderly and systematic manner. The information is communicated through the preparation and distribution of accounting reports, the most common of which are called financial statements. 

A vital element in the communication process is the accountant’s ability and responsibility to analyze and interpret the reported information.

Accounting identifies, records, and communicates economic events, then analyzes and interprets reported information for users.