---
title: "Financial Accounting"
number: 86
date: 2021-08-30
url: https://trevin.co/writing/financial-accounting
standfirst: "General Ledger, Accounts Payable, Accounts Receivable, Asset Management, and Cash Management."
topics: ["ERP programs"]
---
# Financial Accounting

General Ledger, Accounts Payable, Accounts Receivable, Asset Management, and Cash Management.

## Scope

General Ledger, Accounts Payable, Accounts Receivable, Asset Management, and Cash Management.

## Basic Workflow

Transaction Entry → General Ledger Posting → Trial Balance → Financial Reporting → Auditing

## Key Concepts

### 1. Transactions Entry

- **Why:** To keep track of all financial activities and ensure accurate financial records.
- **How:** Transactions are entered manually by accountants or automatically through integrated systems.
- **What:** Recording purchases, sales, receipts, and payments.

**Example:** Like saving receipts to track personal spending, a company records transactions to manage its budget.

### 2. Posting

- **Why:** To consolidate transactions in the general ledger for financial reporting.
- **How:** Batch processing or real-time posting in the general ledger.
- **What:** Finalizing transactions in the accounting records.

**Example:** Like updating a checkbook when checks are cashed or deposits are made.

### 3. Trial Balance

- **Why:** To ensure that the ledger accounts are accurately balanced for reporting.
- **How:** Tallying all debits and credits to see if they match.
- **What:** Checking for discrepancies in the financial entries.

**Example:** Like making sure money spent plus money saved equals your total initial budget.

### 4. Financial Reporting

- **Why:** To provide stakeholders with a snapshot of financial health.
- **How:** Generating balance sheets, income statements, and cash flow statements.
- **What:** Creating official documents that show financial performance.

**Example:** Like summarizing your monthly spending and savings to see your financial status.