The recording process is the process of which we record the business transactions by using an accounting procedure. Recording process starts with recording in:
- Journals
- Ledger and then
- Trial Balance
For the Journal:
- transaction takes place;
- determine whether an asset, a liability, owner’s equity, revenue or expense is effected by the transaction and
- apply the rules of debit and credit
For the Ledger:
- periodically, the journal entries are transferrd to the accounts in the ledger and
- the ledger is a list of accounts that the company have, normally known as Chart of Accounts
Lastly, the Trial Balance:
- the trial balance is a list of account balance from the ledger;
- at the end of each accounting period, the company will prepare a trial balance and
- the trial balance should balance i.e. the total debit should equal to credit.