General Accounting
The basic principles, processes, and practices used to record, classify, summarize, and interpret financial transactions within a business or organization. It’s an essential part of a company’s financial management and ensures accurate financial reporting.
1. Journal Entries
Recording all financial transactions in a company’s general ledger. These are typically categorized as either debits or credits.
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2. General Ledger
A complete record of all the company’s financial transactions, broken down into individual accounts, such as cash, accounts payable, and revenue.
3. Trial Balance
A list of all the general ledger accounts and their balances. It helps ensure that debits equal credits and is typically prepared before financial statements.
4. Financial Statements
The preparation of key reports, including the balance sheet, income statement (profit and loss), and cash flow statement. These provide an overview of the company’s financial health.
5. Accounts Payable and Receivable
Managing the amounts the company owes (payable) and the amounts owed to the company (receivable).
6. Reconciliation
Ensuring that records in the general ledger match those in external sources, such as bank statements.
7. Accounting Principles
The application of standardized guidelines such as GAAP (Generally Accepted Accounting Principles) or IFRS (International Financial Reporting Standards), which guide the preparation and presentation of financial data.