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Question

Sort the following accounting process:
  1. Journal
  2. Ledger
  3. Trial Balance
  4. Financial Statement


Solution

The correct option is
Accounting process starts with identifying financial transaction. It starts with:
1. Recording the transaction - It is the process of entering business transaction of financial nature in the books of original entry i.e., journal.
2. Classification - It can be defined as the process of grouping transaction or entries of similar nature at one place which is done in ledger.
3. Summarising -It involves presenting the classified datain an understandable manner which is useful to its users. It is done in Trial Balance.
4. Analysis and Interpretation - Analysis and interpretation of financial data is done with the help of financial statement i.e balance sheet which helps its users to make judegement.

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