Phases of Accounting

• 1. Recording

  • Deals with the writing on the books or records of the business transactions or events
  • Technically referred to as bookkeeping
• 2. Classifying

  • Items are sorted and grouped.
  • Similar items are classified under the same name.
  • May be classified as asset, liability, capital, revenue or expense accounts
• 4. Interpreting

  Due to the technicality of accounting reports, the accountant’s interpretation on the financial statement is needed. In this case, analysis reports are submitted together with the financial statements.
• 3. Summarizing

  • Data recorded are summarized through financial statements.

  These reports are submitted to the management at the end of each accounting period or as the need arise.