Question

State the fundamental steps in the accounting process __________.

• A. Identifying financial transaction
• B. Recording the business transaction
• C. Classifying the business transaction
• D. All of the above

Answer 1

Answer: (D)

All of the above

The first step involves identifying the transactions to be recorded and preparing the source documents which are in turn recorded in the basic book of original entry called journal and are then posted to individual accounts in the principal book called ledger. It involves classification of the business transaction, The process of recording transactions in journal is called journalising, Once this journalising process is completed, the journal entry provides a complete and useful description of the event's effect on the organisation. The process of transferring journal entry to individual accounts is called posting.