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Which account is affected by the transaction? But you can see things are very complicated to answer. There are no excuses for out-and-out misinterpretation of company results or sloppy auditing.
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In each transaction, there should be the date, the amount and a description. In accounting thesis, debit means one thing that should be mentioned on left-hand side. On the contrary, credit means one thing that should be mentioned on the right-hand side.
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Identify the transaction from source document like purchase orders, loan agreements, invoices, etc. Post the entry in the individual accounts in ledgers. Traditionally, Ts represent the accounts with debits on the left and credits on the right. After reporting, prepare preliminary trial balance of all the accounts by netting all the debits and credits in each account to calculate their balances.
Make a total of the left and right side balances and make sure the two columns should be equal. Adjust the entries that are not generated through particular source of documents.
For example, depreciation expenses are recorded for items like equipment to account for the use of the asset and the loss of its value over time. Prepare an adjusted trial balance of the accounts. The left-hand side debits and right-hand side credits must be equal in terms of the value.
Calculate the total of the sum of the various accounts and present them in financial statements. The statement is created for both internal and external use. Wind up the books of the current month by recording the necessary reversing entries to start fresh in a new period. Our accounting assignment help gives you an overall idea about what accounting is, what the fundamentals of accounting are and how accounting process works.
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