The Recording and Posting Process in Accounting - Essay Example

The process of recording and posting involves the following:
 Analyzing every transaction in relation to its effects on the accounts; this step requires that there has to be a document showing an accounting transaction has occurred. That is the source document, which is the basis of an accounting entry

 Recording the information of the transaction in a journal: After recording data chronologically in the source document, it is transferred to the general journal, which may have other specific journals such as sales and cash journals as suggested by Simplestudies LLC (2012).

 The journal information is transmitted relevant accounts in the ledger hence posting: The information from the general journal is transferred to the ledger where information of all accounts in a business is maintained.

 Preparing a trial balance: A trial balance contains a list of all accounts with their balances at a particular time

 Posting is important in double-entry accounts as it transfers the debit and credit aspects of a financial to relevant accounts.

The Meaning of a Trial Balance
A trial balance in accounting refers to a statement, which has a conventional format of its own. It is not necessarily a ledger account. It provides a summary report used to check whether all financial transactions in the accounting system follow the double-entry rules as suggested by Simplestudies LLC (2012). The trial balance is the sixth step in the accounting process and it can be prepared at any time. However, it is mostly prepared before financial statements are prepared. The trial balance as opposed to the financial statement is prepared and applied by the internal accounting team.

Purpose of Trial Balance
A trial balance is usually prepared in order to check the accuracy of calculations used in the accounting process. In accounting a trial balance is also used to ensure that the rules of double-entry are followed during the recording of financial transactions done at a specific time. This is usually done by summing all debit balances found in the general ledger. It is also done by ensuring that the sum of debit balances is equal to the sum of all credit balances of the general ledger according to Simplestudies LLC (2012). A trial balance usually provides a list of all the accounts found in the general ledger together with their respective balances. It is also used in the preparation of final accounts. The trial balance also helps in comparing the ledger account balances of a particular year with those of the previous year. It can be used in establishing the items that need adjustment in the preparation of financial statements.