The Five Stages of Bookkeeping
Description
Posting to the General Ledger (GL)
After transactions are recorded in the journal, they are summarized and transferred to their respective accounts in the General Ledger. Bookkeeping Services Cincinnati.
Action: Transfer the debit and credit amounts from the journal entries to individual accounts (e.g., Cash, Accounts Payable, Sales Revenue).
Purpose: The GL organizes the entire history of the business’s financial activity by account type, giving you the running balance for every account.
Preparing the Unadjusted Trial Balance
At the end of an accounting period (e.g., month or quarter), a trial balance is prepared to check the mathematical accuracy of the ledger.
Action: Create a list of all General Ledger accounts and their ending balances.
Check: The total dollar amount of all accounts with Debit balances must exactly equal the total dollar amount of all accounts with Credit balances. If they don’t, there’s a recording error that must be fixed before proceeding.
