Within the world of finance, accounting books are reliable sources that support each of the monetary transactions that a company has made throughout a cycle.
With cycle we refer to a certain period of time in which a set of operations is carried out. These can be divided into annual, quarterly or monthly, based on the organizational modality that the administration of the company wishes to carry out.
Once that cycle is over, this series of ledgers are evaluated by the management and administrative entities of the company, to verify that the accounts are managed correctly and that there are no calculation errors or money fluctuations.
Although this may seem like a difficult task, the professional accounting professional need not worry, because with enough concentration and following the steps demonstrated below, you will be able to fulfill this assignment.
The first step of the ledgers is to document the transactions
As the accountant obtains information related to the transactions carried out by the company, You must record them in a document called “Daily Book”.
This little book is responsible for carrying a chronological order of each of the financial operations that the organization has carried out day after day, in such a way as to maintain an accounting backup of all the investments and expenses that the management has made throughout the cycle.
Therefore, documenting these financial data is done based on the accounting policies known and studied by the professional, so that it can be indicated in where the expenses originated or where the money was obtained, through the debit and credit sections within the accounting books.
Transfer the information to the general ledger
After having entered all the information into the journal, the accounting professional must take care of transfer these daily transactions within the general ledger.
This is one of the accounting books whose content covers all financial operations that are carried out by the company, that is, it supports information on purchase, expense, rent, salary, loans, among others.
Once this has been done successfully, the information provided within each book will allow the accountant to can issue financial statements.
Once the accounting books have been completed, a trial balance must be made
Regardless of the style of work environment that each organization has, each of the roles of this entity, highlighting the accountant and the administrative group, must be in charge of perform a trial balance to verify the entered data within these accounting books.
In this way, the accuracy in which each of these records have been made is evaluated, presenting the lists of financial statements generated once each book has been closed.
That is why, when obtaining all the data, a sum of the credit and debit accounts of each book is made to evaluate if there are relationships between each one.
IF for any reason there is an imbalance between the accounts of both accounting books, will indicate that there has been an error throughout the transaction log and a thorough content assessment will be required until the source of the problem is found.
What should you do once the accounts for these books have been closed?
If the balance sheet has not shown any error, you can proceed to collect each of the financial statements made within the accounting cycle and must be attached to the ledger.
This process requires a reorganization of dataIt must be taken into account that each one must be part of the activity that generated said monetary transaction.
That is why whether the content of the statement must be attached to a financial budget project, an investment made or a payment made to a specific service, each finance must be together with the corresponding operation.
In this way, future confusion will be avoided if the contents of the accounting books are again evaluated or consulted throughout the work of the company.