Definitions of basic concepts and basic accounting operations;
Major headings of accounting are assets, liabilities, capital, income, expenses, withdrawals
Part 6: Continuation of other accounting concepts and operations
Test balance:
In the two-way accounting system, each transaction is recorded in the books with equal amount of debtor and creditor. If the accounts are recorded and balanced correctly, the sum of the debit balances of the general ledger accounts should be equal to the sum of the credit balances of the accounts. One of the tools that accountants use to test the accuracy of accounting documents and is prepared at the end of each month is the trial balance. A trial balance is a list of the balances of the general ledger accounts, which usually allows accountants to ensure that the sum of debit balances equals the sum of credit balances. A trial balance is a table in which the balances of the general ledger accounts are written.
Profit and loss statement:
As the name suggests, it is prepared to determine the special profit or loss of a financial unit and includes a summary of income and expenses for a certain period of time. Profit and loss statement is also called income statement or statement of operations. The most important part of the profit and loss statement is its final part, i.e. the special profit or loss, which shows the result of the activity of a business unit, whether the business unit was profitable during the financial period or not. This statement is usually done in two ways. is prepared
Single step:
In this method, first, all the incomes are brought together and then all the expenses are brought under them, and finally, from their difference, we get the profit or loss before tax deduction, which with tax deduction (if the company has a profit) is the profit or loss. We will get the loss after tax deduction or special profit or loss.
Two steps:
In this method, first the operating incomes are mentioned, followed by the operating expenses, and from the difference of these two, we get the operating profit or loss. In the next step, the non-operating incomes and non-operating expenses are brought, which from the difference of this stage and the previous stage, the profit and We get the loss before tax deduction, and with the tax deduction, we will get the profit and loss after tax deduction, or special profit and loss.
List of accounts and account coding:
A list of general ledger accounts is prepared in each institution. The list of accounts to facilitate the classification and recording of events, a specific number is usually considered for each account, which is also called the account code. Accounts are numbered in the order they appear in the financial statements. That is, assets are listed first, then liabilities and capital, and finally incomes and expenses.
Accounting operations that are performed from the beginning of the financial period to the end of the period include:
Collecting information related to financial events includes gathering positive evidence
Analyzing financial events and recording them in the accounting document
Recording financial events in the journal
Transferring information from the newspaper to the general ledger
Preparation of uncorrected trial balance
Correction and adjustment of accounts
Preparation of revised trial balance
Preparation of profit and loss statement and cash flow statement
Closing temporary accounts
Preparation of closing trial balance
Preparation of balance sheet
Mehdi Koh Soltani (financial services, accounting, financial and tax consultant):
Group of accountants, auditors, Tabriz
https://t.me/joinchat/BnzBsTuioTshiXBwf9bBPQ
This post is written by Mahdi_kohsoltani