120 word response

There are four steps that need to be taken to process a business's financial transactions. The first is to identify all of the financial transactions that a company has made within a specific time frame, usually monthly. The second step is to analyze each transaction individually. The next step is record these transactions onto a financial journal by date. The final step is to transfer these figures onto a company ledger.. It is very important that you record all of the transactions as they will be needed to prepare your financial statements. There are four statements that are needed to complete your company's record keeping. Making sure to record the transactions by date will make it easier to complete your financial statements. These have to be done in a certain order with the income statement being the very first one. The next statement must be the owner equity statement , which will show what equity the owner has. Be mindful that this statement will show the changes in the owner's finances. The next statement is the balance sheet which is sometimes overlooked if the company seems to be doing well. This is the most important statement to me, everything must be recorded correctly and balanced. Lastly is there has to be a cash-flow statement, which will show the funds coming in and going out. It is vital that these statements be completed in a certain order asinvestors will be scrutinizing these statements.