The first step in accounting process is___________?
Correct answer: B. Identifying the transaction
- A. Recording the transaction
- B. Identifying the transaction
- C. Posting the transaction
- D. Preparing the source documents
Explanation
Accounting begins by identifying an event as a transaction that affects the business financially; only then is it recorded from the relevant source document. Posting occurs later after journalisation.
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About Accounting Principles
Accounting principles explain the rules used to record, classify and report business transactions. Coverage includes the accounting equation, double-entry system, accrual and cash bases, matching and prudence concepts, consistency, going concern, business entity, and the difference between capital and revenue items.
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