Question

Identify and discuss the steps in the recording process. Be sure to discuss what each step does and how it relates to the steps before and after it. Then, answer the following questions:

Should business transactions credits and debits be recorded directly into the ledger accounts?

What are the advantages of recording in the journal before posting transactions into the ledger?

Answer 1

The business transactions cannot be directly posted into the ledgeraccount.

All the transaction should be recorded in journal before posting into ledger account.This helps to prevent errors in accounting. The recording process is very important in maintaining a good account book. The process start from identifying and analysing transaction to post closing of trail balance.

The steps involved in record process

​​Identifying and analysing business transaction

In this process identify all the transactions pertaing to that business entity and analyze each transaction in terms of its effect on the account. Required evidence for the transactions like bill, check.

Transaction record into Journal

A journal is a book where the transactions are recorded. After identification and analysing process the transactions are recorded in to journal.

Posting to the Ledger

A Ledger is a collection of accounts, it also know as book of final entry. This is the most important step in recording process. In this process transfer the journal into appropriate accounts in the ledger.

Advantages of recording in the journal before posting into ledger.

• The journal prevent or helps to understand the errrors in acccounting, because debit and credit amounts for each entry can be readily compared.
• The Journal provide a chronological record of transactions.
• The journal discloses in one place the complete effect of a transaction