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7 key Steps in the Accounting Process Every Business Need to Know

To understand and properly execute all the necessary steps in the accounting cycle the companies are advised to enlist the services of the best accounting& bookkeeping firms in the UAE.

The Accounting Cycle

The process of accounting is crucial for every successful company in the UAE and the business needs to have a proper accounting process within the organization.

The financial statements of the company present an accurate picture over a Financial period. The steps in the accounting cycle help the businesses in presenting a clear view of the financial health of the organization.

The Accounting Cycle: The Key Steps in the Accounting Process

Identifying and Analyzing Business Transactions

Analyzing the transactions is the first yet crucial step in the whole accounting process. The companies need to identify the accounts that are affected by the transactions. The process involves analyzing source documents like the purchase orders, invoices, loan agreements, receipts, etc. that are the evidence or records for business transactions in the company. The companies should avoid mixing personal and business transactions.

Posting Transactions in Journals

The next step in the accounting cycle is journalizing the transactions. The outsourced accounting firms in the UAE can make sure that all the financial information pertaining to the business has been recorded in the journal. This process is complete with using the double-entry system of bookkeeping, where the transactions are recorded in debit and credit accounts. The journal carries the date and description and name of the payee and payer of the transactions.

Posting from Journal to Ledger

The financial information recorded in the journal book, both debit, and credit, now put into the ledger. The ledger is also referred to as the book of final entry and it shows the company’s accounts and the changes it underwent due to various business transactions. All the debit and credit journal cash transactions will be transferred to the cash ledger.

Recording adjusting entries

The accountants in the UAE at this stage will record the adjusting entries to update the accounts before summarizing them in the financial statement. The entries will be journalized and posted to the ledger.

Preparing the adjusted trial balance

After the new entries are created, the businesses got to calculate a new trial balance to check if the debits are equal to the credits. it is an important phase in the accounting cycle where an accounting firm starting to prepare for the financial statements of the company. and any error detected in the adjusted trial balance needs immediate correction.

Preparing financial statements

The financial statements of corporations are statements such as,

  • Income Statement
  • Balance Sheet
  • Cash flow Statement
  • Posting closing entries

As the accounting period ends, the temporary accounts are closed or reduced to zero. These include expenses, income, and withdrawal accounts. It must be noted that the closing entries are made for temporary accounts and not for permanent accounts or the account of the balance sheet.

Post-Closing Trial Balance

After the closing of the trial balance, the book now consists only of permanent entries like assets, liabilities, and owner’s equity. This step makes sure of the proper closure of revenue and expense accounts. It also aims to ensure that total debit and credit are equal. the businesses have to be compelled to recheck the book again for errors and correct them.

Accounting Firms in Dubai, UAE

To understand and properly execute all the necessary steps in the accounting cycle the companies are advised to enlist the services of the best accounting& bookkeeping firms in the UAE. Parsh is a reputed accounting firm in Dubai; UAE that has helped businesses across different sectors maintains their books of accounts in compliance with the local and international regulations. Parsh’s qualified and experienced team of Chartered Accountants ensures that the financial statements and reports of companies comply with the International Financial Reporting Standard (IFRS). Being the best accounting firm in the UAE, Parsh is committed to address key issues faced by the company including cash flow management, planning & forecasting of budgets and thereby help the business grow. Accounting and Bookkeeping companies in Dubai help you to maintain all compliance related to accounting and tax.

If you want to avail of these services you may contact to best accounting and bookkeeping companies in UAE.

The size of the business is not any matter but accounting and bookkeeping services are important to each business. These services are necessary for businesses to survive, grow, and thrive. The goal of each service is the same; it’ll assist you at various levels of your financial cycle.

Accounting and Bookkeeping service provider in Dubai helps you to maintain all compliance related to accounting and tax.

If you want to avail of these services you may contact to best accounting and bookkeeping companies in UAE.

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