How to Write an Accounting Essay?
The most crucial component of writing an accounting essay or report is to ensure that the content is instructive and factually accurate, that opinions are supported by facts and statistics following the most recent financial reporting requirements, and that the article considers all points of view. A good accounting essay must also have a nice layout and presentation. Including an introduction to launch the essay is essential for two reasons: first, to address the topic, and second, to identify the audience.
Steps to write an accounting essay
Before embarking on any written exercise, the writer must have it clear in their mind who they are writing for, so consider your audience’s level of accountancy knowledge. In addition, the essay must provide an impartial conclusion to ensure that it has addressed the accounting topic given. Here are the steps for accounting assignment help and accounting homework help.
#1 – Identify the Transaction
The first stage in the accounting process is to identify the business transaction. The company entity must identify financial and monetary transactions. As a result, only monetary transactions are recorded. Furthermore, only company transactions need to be registered, and not the owner’s transactions are to be included in the business’s books of accounts.
#2 – Recording of the Transactions in the Journal
The second phase in the accounting process is to make a journal entry for each accounting transaction after identifying the transactions. The point at which transactions are recorded is determined by the entity’s accounting policy, i.e., accrual or cash basis of accounting.
Revenues and costs are recorded in the entity’s books at the time when they are generated and incurred, regardless of actual cash receipt and payment, under the accrual method of accounting. On the other hand, cash accounting records transactions only when actual cash is received/paid. Every transaction in a dual entry system impacts at least two accounts, i.e., one version is debited, and another account is credited. For example, if the purchases are made in cash, the purchases account is debited (the purchases account is credited), and the cash account is credited (cash decreases).
#3 – Posting in the Ledger
Individual accounts are reported in the general ledger when the transaction is recorded in the Journal. It allows the owner/accountant to know the amount of each account individually. For example, all debits and credits from a bank account are moved to the ledger account, allowing you to see the change in bank balance over time. Finally, we may use it to calculate the ending bank balance.
#4 – Unadjusted Trial Balance
The company’s trial balance is prepared to determine whether or not the debits match the credits. The primary goal of the trial balance is to discover any errors that occurred throughout the preceding phase. The trial balance shows all account balances at the period specified. Following the production of the trial balance, it is reviewed to ensure that the total of all credits equals the sum of all debts; if the capacity does not match, an error must be detected and fixed. Other explanations for the error may exist, but an accountant will first attempt to discover the mistake by preparing the trial balance. In addition, trial balance allows you to see the aggregate of all account balances.
#5 – Adjusting Journal Entries
When the accrual method of accounting is used, some entries must be made at the end of the fiscal year, such as entries for expenses that may have been incurred but are not yet recorded in the Journal and entries for income that may have been earned but not yet recorded in the books. For example, the interest on a fixed deposit is made each year, but it is accumulated in the fixed deposit amount. This interest income must be recorded in the books of accounts yearly because the interest is earned annual, regardless of the amount paid once the fixed deposit matures.
#6 – Adjusted Trial Balance
After all of the adjusting entries have been made, a trial balance must be generated before preparing the financial statements to ensure that all of the credits are equal to the debits following the adjustment entries.
#7 – Preparation of Financial Statements
After all of the preceding steps have been completed, the company’s financial statements are prepared to determine the company’s actual financial position, profitability position, and cash flow position. A profit and loss statement is made to know the profitability position, a balance sheet is prepared to understand the financial situation, and a cash flow statement is ready to learn the changes in cash flows from the three company operations (operating, investing, and financing activities).
#8 – Closing Entries
Finally, this phase brings the accounting cycle to a close. These transactions convert temporary account balances to permanent accounts. Temporary accounts are those with balances that finish in a single accounting year, such as sales, purchases, and costs. These balances are transferred to the income statement and then to the permanent account, i.e., the profit/loss account is transferred to the retained earnings account. It should be noted that only temporary accounts, not permanent ones, are closed (accounts that are balance sheet accounts such as fixed assets, debtors, inventory, etc.)
After closing entries are made, the trial balance is created again to ensure that the debit equals the credit. The accounting cycle begins again with the start of another fiscal year.
We hope these above steps will be beneficial for you to write an accounting essay. If you’re looking for accounting assignment help in Australia, you can take help from Assignment Panda, providing the best accounting assignment writing services in Australia.