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First, businesses need to analyze their day to day transactions to see what business accounts they will use on a daily basis.
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Once all accounts have been identified, businesses will spend their months journalizing and posting their transactions into the appropriate journals and ledgers.
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As the end of the year approaches, businesses should use the numbers recorded through the journalizing and posting to create financial statements for their company. Financials include a Worksheet, Income Statement and Balance Sheet.
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At the end of every fiscal period, accountants must complete adjusting entries to bring certain account balances up to date and complete closing entries to bring temporary account balances back to zero to begin the next cycle.
