Week 2 Assignment Part D
The general goals of financial reporting are to keep an accurate record of all financial transactions of an organization. Making sure to be ethical and adhering to the generally accepted principles of accounting is a very important goal of financial reporting and for the company and you, my creditors. The first step I took in the recording process was to input all the transactions of the business, Jane Kent, Incorporated, into a general journal. A general journal provides you with a chronological record of all transactions made. It discloses the complete effects of each transaction in one place. It also helps to find any errors that may be present because the debit and credit amounts for each entry can be compared. This step is called journalizing. The next step I took was to input the entire group of accounts that are maintained by this company into a general ledger. This step is called posting. A general ledger keeps all information about changes in each account balance. The general ledger consists of all assets, liabilities, and stockholder’s equity accounts. The next step I took was to put all of the information obtained through the last two steps into a trial balance. A trial balance is list of accounts and their balances at a certain point in time. The trial balance checks to make sure that the debits equal the credits after the information has been posted. A trial balance is used to make the financial statements that you see in order to continue my credit account with you. The steps I took in the recording process help to support the principles of accounting by keeping all of the transactions accounted for and able to be understood to you. If a mistake is made it will be found throughout this process. Finding mistakes and keeping track of all the financial aspects of the company show the company’s integrity, ethics and ability to abide by the generally accepted accounting principles.