Question

Which accounting process involves the preparation of trial balance, profit & loss account, and balance sheet?

• A. Classifying
• B. Summarising
• C. Interpreting
• D. Communicating

Answer 1

Answer:

B. Summarising

FUNCTIONS OF ACCOUNTING:

1. Recording - Journal

2. Classifying - Ledger

3. Summarising - Trail Balance and L A/C, B.S.

4. Analysis and Interpretations

5. Communications

1. Recording : The basic function of Accounting is recording of business transactions.

2. Classifying : It is the process of bringing together items of similar nature at one place. It is done in the book called ledger.

3. Summarising : It is the presentation of classified data in a way that is understandable by the users. It includes the preparation of trail balance, P AND L A/C ,B.S.

4. Analysis and interpretation : The financial data is analysed by the users to get information about the result of business and its financial positions

5. Communication : It is with the help of accounting that an organisation communicates with the interested parties