Accounting Process

1. Recording phase
a. Analyzing
i. E.g. Dec 1 Hiring of an employee
ii. E.g. Borrowed 1M, 12% per annum payable Dec 1 next yr end of
acctg period dec 31
b. Recording
i. E.g. no entry
ii. E.g. Dr. Cash Cr. Notes
Accounts
Real/permanent
(mas konti letters- Balance Sheet)
Nominal/temporary(mas madami- Income Statement) except. Owners
Drawing
Adjunct
(ad- add)
Contra
(da-dalawa na lang yan)
Suspense
(wag muna idiscuss kaya suspense)
Journals
General Journal
Special Journal
Sales Journal- Sale on Acct. (Merchandise)
Purchase Journal- Purchase on Account (Merchandise and nonmerchandise)
Cash receipts journal- Cash inflow including cash sale
Cash disbursement journal- Cash outflow including cash purchase
c. Posting
i. General Ledger
ii. Subsidiary Ledger detailed
2. Summarizing/Reporting phase
a. Unadjusted T-Bal. not yet prepared adjusting entries
b. Adjusting Entries- transactions take place over more than one
accounting period (Going Concern, Accrual Basis)
7 usual
i. Ending Invty
ii. Depreciation
iii. Doubtful Accounts
iv. Accrued Income
v. Accrued Expense
Dr. Int. Exp. Cr. Int. pay.
vi. Prepaid
1. Asset
2. Expense
vii. Deferred
1. Liability
2. Income
c. Financial Statements

i. Income Statement
ii. Statement of Changes in Equity
iii. Statement of Financial Position
d. Closing Entries- to reduce the balances of temporary accounts to zero
so that they may be used to accumulate the revenue, expenses and
dividends of the next period
e. Postclosing T-Bal.*
f. Reversing Entries*- beg of next accounting period to
standardize procedures
*optional
1.
2.
3.
4.

Accrued Income
Accrued Expense
Prepaid Expense (exp)
Deferred Income (inc)