In this clip, we are going to discuss about the accounting
process.
I have told you about the meaning of accounting in previous
clips.
Accounting means when we do accounting for a businessman,
that means by doing some calculations, playing some
counting, calculating and finding out his profitability,
whether he is in business profit or loss, how many assets
are there, how many liabilities are there, all those things.
So to do accounting, to get all this data, where should we
start from, where should we end?
That is called, the start to the end process is called
accounting process.
Accounting cycle is also another name for it.
Accounting cycle.
Look at this, friends.
Call it accounting process.
Or call it accounting cycle.
It has only one objective.
To find out the profitability and financial position of the
business.
Profitability means, whether there is profit or loss, and
financial position means, how many assets are there in the
business, and liabilities means, how much debt is there on
the head of the business.
These four things have to be known through accounting.
Profitability means, whether there is profit or loss.
Financial position means, how many assets are there in the
business, and how much money will be used from those assets
to pay off liabilities.
This is the objective of accounting process and accounting
cycle.
Now to do this work, to get profitability and financial
position, the accounting process and accounting cycle that
we have to do, we have some steps in it.
We have some steps in it.
The same steps are written in our notes, which we are going
to see.
Let's see what steps we have.
First of all,
Steps involved in the accounting process are based on the
attributes of accounting, which are presented below in the
form of a diagram.
Dear students, we will tell you through the diagram, what
is the accounting process, why and how it is.
Number one, collecting and analyzing documents.
Collecting and analyzing documents.
Accounting means counting, means playing counting. So for
that, we should know first, which activities we have to use
in accounting, to get profitability and financial position.
So first of all, we collect data.
What are the transactions and events in the business, which
we have to use to get profitability and financial position,
to achieve the ultimate objective of accounting.
So first, we collect data.
And then, the next step is, posting in journal. Now
friends, what is journal entry, why is it, how is it, what
is posting in journal, this is a different topic, a
different chapter, which is called journal.
This is completely different.
We will deal with it separately.
Now just pay attention, that posting in journal, is a part
of our accounting, is a part of our accounting, is a step.
Pay attention to this.
What happens in that, I will tell you a little bit.
First time, in which book, a transaction or entry is
recorded, that book is called journal.
J-O-U-R-N-A-L.
Children make mistakes.
And I am saying, people who have been doing accounting for
a long time, they also make mistakes.
What sir?
See friends, there is one word, general.
G-E-N-E-R-A-L.
And this word is journal.
J-O-U-R-N-A-L.
In general,
Ne comes first,
Re comes later, and starts with G.
In journal,
Re comes first,
Ne comes later, and starts with J.
So this journal means,
Aam, means common.
Not mango,
Aam means common.
And this journal means, that book, that book, in which, for
the first time, a transaction is recorded in business.
A business transaction, in which it is recorded for the
first time, that book is called, journal.
And recording, in journal, a business transaction, for the
first time, is called, journal entry.
Journal entry.
Okay sir.
Then next step is, ledger.
Next step is, ledger.
So friends, first of all, collecting and analyzing
documents.
Then, first of all, we make a book, which is called,
journal.
Then, looking at journal, we make another book.
Not only this, friends, we get profitability and financial
position. We have to work hard.
First, we record a transaction, in journal book.
Then, we make another book, looking at journal, which is
called, ledger.
Why do we make?
How do we make?
When do we make?
Later.
Now, what is happening, learn that.
Looking at journal book, we make a book, which is called,
ledger.
Then, we make a book from ledger, which is called, trial
balance.
Sir, how are these names coming?
Say it three times with me.
Jai Mata Di,
Jai Mata Di.
No.
Although, I have said it.
Because, your beliefs are connected.
What to say three times?
Journal, ledger, trial balance.
Journal, then ledger, then trial balance.
Okay sir.
Then after that, adjustment entries.
Then, preparation of financial statements.
Then, posting of closing entries.
Then, posting of closing trial balance.
This is our complete accounting process.
Now, you have to learn this step.
What happens, after collecting data, first of all, in first
book, entry journal.
Looking at journal, we make a small summary.
Small summary of journal.
And, it presents better data, which is called, ledger.
trial balance.
Journal, summary, ledger.
Ledger, summary, trial balance.
Then, trial balance.
Then, preparation of financial statements.
Means, those two statements, which tell us about
profitability, and financial position. Those two
statements, which tell us about profitability, and
financial position.
We make them on seven steps.
Which are those?
Trading account,
P&L account, and balance sheet.
Sir, these are three.
Trading account,
P&L account, and balance sheet.
You have said two.
Trading and P&L account, are made together.
And, balance sheet is made together.
In the chapter of accounting equation, it is well defined,
how balance sheet is made.
And, trading P&L is a very simple thing. Trading P&L is an
account, in which, all income is written on one side.
All expenses are written on other side.
And, minus expenses from income, to find out, how much
profit is coming.
Or, how much loss is coming.
When loss will come?
When expenses will be more, when will there be profit?
And, when profit will come?
When expenses will be more, when will there be profit?
Let's deal according to this.
Let's see, according to this.
Let's go.
Oh, oh, oh.
Okay, sir.
Okay.
We understand your point.
Then, what is this on eighth step? Post closing entries.
Post closing entries.
This is the same, transfer in trading P&L account, and,
closing trading P&L account, closing balance sheet, all
these are those things.
Then, when we finally close them, this is the step.
And, ninth step is not that important. If you skip it, it
will be fine.
This diagram is very detailed here.
That's why it is written.
Post closing trial balance, there is no need to do so much.
Keep it up to eighth point.
Okay.
Okay, sir.
So, this is accounting cycle.
So, now, we can guess, that, in the coming steps, what we
will do to you. In the coming steps, you can guess, how we
will move things forward.
Friends, journal will be taught to you. That, how to record
the transaction in journal for the first time.
There is a chapter named journal.
Then, ledger will be taught to you. Then, trial balance
will be taught to you.
Then, after trial balance, financial statements,
adjustments will come in between.
Then, financial statement, trading P&L balance sheet, all
these chapters are with us. All these chapters are with us,
my dear friends.
All the steps in accounting process, we have to learn in
detail. Those are our chapters.
Now, you think yourself.
Just think yourself, everybody.
You think yourself.
What is the objective of accounting?
Making profit.
Profitability.
Finding profit or loss.
And, financial position, that is, finding the asset
liability.
To do that work, we have an accounting process, which we
follow.
In which, journal is there, ledger is there, trial balance
is there, adjustments are there.
Then, financial statement, that is, trading P&L balance
sheet, all these chapters are with us.
Financial statement, that is, trading P&L balance sheet,
preparation is there.
So, we have to learn these steps, one by one, in full
detail, in a good way, well-encoded.
When you understand that, then that profitability, will
come after you.
That balance sheet, will come after you.
There will be no problem, anyhow.
We have seen 3DET.
Follow excellence, success will come after you.
I am telling you, follow the steps of the process.
Profitability, and financial position, will come after you.
You don't need to learn them separately.
During that time, so much knowledge, so much information
will be collected, that you will buy, enjoyably,
profitability, financial position, you will learn to
achieve.
Okay, sir.
So, friends, my request is always, was, is, and will be,
whether it is a clip of 10 minutes, or a clip of 20
minutes, see, we have made all kinds of clips, for you.
The whole topic, detailed from start to end, discussion,
that whole in one hour, or in half an hour.
The topic, we feel that, if you have any small confusion,
you don't have to watch the whole one hour video, you just
want this point, so for that, we have made separate clips
of 10 minutes.
There is a clip of 20 minutes, there is a clip of 5
minutes, there is a clip of 2 minutes, there is an image of
every point.
importance, importance and according to your convenience
things were designed in this way so please take advantage
of it and the first way to take advantage is to revise what
is being done and take it in grip with this note we end
this small clip here we will meet again in the next clip
thank you bye bye and take care