Business Accounting Services
Posted On: 06/07/21 - 0

Business Accounting Services

Many people view business accounting services as very complex and time consuming. The task of recording accounting transactions are called journal entries. These transactions are a huge part of business accounting services. Each transaction in the financial year of a big or small firm needs to be recorded. When you hire a professional service,  you can follow all your transactions through the statements provided by the accountant.  Often, this proves to be more time efficient versus learning to do this yourself. Especially, when your business really starts to grow.  But, it is always good to have an understanding of the basic principals.

What Are Journal Entries?

In traditional accounting services, a journal is defined as the record for any transaction on any given date. The journal entries are recorded at the same time as the transaction takes place.  There are various examples of journals used in the form of a book.  Like a sales journal, purchase journal, cash disbursal journal, accounts receivable journal, etc. You must include the following information in your journal books.  The exact date on which the transaction took place. The accounts and amounts of the transaction. Who the transaction is from. And a brief description of that same transaction.

How Do You Do Journal Entries?

Identifying Transactions

The first step to journal entry is to identify the transaction which has occurred. If you don’t know what type of transaction it is, you cannot note it down in the correct journal. You need to know about the basic rules of accounting  which include knowing which accounts are to be credited and which ones to debit. You must provide a description of the transaction made.

Analyzing Transactions

Once the transaction has been identified, you must document the impact of the transaction. For example, when the retailer purchases goods for resale the following takes place. Cash paid for the goods and the goods purchased assets. Two of the assets are affected by this one transaction. One of the assets, which is cash, is credited.  The other being the goods, that will be eventually sold for profit, are debited. There has been no increase or decrease in asset value, but the cash, is converted economically into another asset which is the goods. If the goods are somehow damaged then it becomes a liability instead of an asset.

Journalizing the Transactions

Now that the event of a transaction has been identified and it’s impact on accounting has been identified, the entry is made in the journal book. Journal entries are records of the credited and debited accounts, with the respective money paid of the transaction made. The exact date of the transaction has to be noted at the beginning. Then comes the short description or memo of the transaction. The journal accounts that are to be debited are noted first.  Then comes the credited account. The given and received amounts are then noted by the account names.

Recording journal entries accurately requires a bit of experience.  If you feel that you just don’t have the time, or the interest, contact Padgett Business Services N.W. for all of your accounting and bookkeeping needs.

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