Question

There are four steps that need to be taken to process a business's financial transactions. The first is to identify all of the financial transactions that a company has made within a specific time frame, usually monthly. The second step is to analyze each transaction individually. The next step is record these transactions onto a financial journal by date. The final step is to transfer these figures onto a company ledger.. It is very important that you record all of the transactions as they will be needed to prepare your financial statements. There are four statements that are needed to complete your company's record keeping. Making sure to record the transactions by date will make it easier to complete your financial statements. These have to be done in a certain order with the income statement being the very first one. The next statement must be the owner equity statement , which will show what equity the owner has. Be mindful that this statement will show the changes in the owner's finances. The next statement is the balance sheet which is sometimes overlooked if the company seems to be doing well. This is the most important statement to me, everything must be recorded correctly and balanced. Lastly is there has to be a cash-flow statement, which will show the funds coming in and going out. It is vital that these statements be completed in a certain order asinvestors will be scrutinizing these statements.

Answer 1

The four step of the process of business financial transaction are Identifying the financial transactions of the company usually a month, analyzing each transaction, journalizing the transaction by date and transferring the figures to the ledger. It is very important to record all the transactions that are needed to complete financial statements. The four statements to record the financial statements are Preparation of the Income statement, Owner's equity statement which shows the equity the owner has, The Balance sheet, which is very important and need to be recorded correctly and balanced.Last is the cashflow statements which recorded the funds inflow and outflow. These statements are to be recorded in order as the investors scrutinizes these statements.