Financial recording is a necessary action to ensure that businesses can keep accurate, easy to understand records off all financial transactions that occur during the conduct of business. The major function of these financial reports, other than record keeping, is to ensure the balance of all debits and credits. When we create accounts, T accounts, we always insert debits on the left side and credits on the right side of the account; this provides a uniform system for accountants while enabling users to balance their accounts.

The steps taken during the recording process are fairly simple. First, analyze each transaction or business entry to determine the effect on the accounts. This step allows users to determine whether the transaction is a debit or credit. The second step in the financial recording process is to enter the transaction into a journal. The journal is typically displayed in chronological order and a general journal will include information such as date, account titles, and explanations, and the amounts. The last step in the process is transferring the information from the journal to the ledger. The ledger is the entire group of accounts that are maintained by the organization and keeps all of the information in one place.

For Jane Kent’s business transactions, the first step in completing the journal is to organize all transactions by determining if they are debits or credits and listing them by date. After determining what category the transaction belonged in, I then separated them into different accounts; cash, supplies, revenue and so on. The last step for Jane is the trial balance sheet. This sheet basically contains a summary of the transactions after the balance was determined, then the balance sheet ensured that my debits equaled my credits.

One of the main principles of accounting is the matching principle. By making sure that my revenues equal my expenses I am following this principle. The GAAP are put into place to attempt to standardize and regulate accounting rules and practices. By following the generally accepted accounting practices I was able to successfully complete Jane’s transaction sheets and determine the correct balance between debits and credits.