Page 164 - Plant design and economics for chemical engineers

138 PLANT DESIGN AND ECONOMICS FOR CHEMICAL ENGINEERS
OUTLINE OF ACCOUNTING PROCEDURE

The diagram in Fig. 5-1 shows the standard accounting procedure, starting with
the recording of the original business transactions and proceeding to the final
preparation of summarizing balance sheets and income statements. As the
day-by-day business transactions occur, they are recorded in the journal. A
single journal may be used for all entries in small businesses, but large concerns
ordinarily use several types of journals, such as cash, sales, purchase, and
general journals.
The next step is to assemble the journal entries under appropriate account
headings in the ledger. The process of transferring the daily journal entries to
the ledger is called posting.

-1

Entered in journal
in
journal

Entered
G
JOURNAL

I LEDGER I

By trial bolonces and work sheets
G
FINANCIAL STATEMENTS

FIGURE 5-1
Diagram of accounting procedure.