Recording business transactions requires a entering transact

Recording business transactions requires (a) entering transactions in the general journal and (b) posting of journal entries to the general ledger. Which step requires a greater understanding of accounting principles and why?

Solution

IT IS THE FIRST STEP THAT IS ENTERING TRANSACTION IN THE GENERAL JOURNAL WHICH REQUIRES GREATER UNDERSTANDING OF ACCOUNTING PRINCIPLES.BECAUSE WHILE RECORDING ENTRIES IN JOURNAL ONE SHOULD BE VERY AWARE OF ALL THE ACCOUNTING PRINCIPLES, CRITERIA, RULES AND TECHNIQUES.AN INDIVIDUAL SHOULD HAVE PERFECT KNOWLEDGE OF RULES OF ACCOUNTING RELATED TO REAL ACCOUNT, PERSONAL ACCOUNT, AND NOMINAL ACCOUNT ALONG WITH DEBIT AND CREDIT RULES.BECAUSE THEN ONLY THE CORRECT POSTING CAN TAKE PLACE.AND FURTHER JOURNAL ENTRIES ARE THE STARTING POINT OF ACCOUNTING CYCLE SO A GREAT CAUTION AND KNOWLEDGE IS REQUIRED TO PREPARE THEM SO THAT ULTIMATELY CORRECT AND FAIR FINANCIAL STATEMENT CAN BE PRESENTED.

AFTER THAT POSTING FROM JOURNAL TO LEDGER JUST REQUIRES FORMAT KNOWLEDGE I.E PRESENTATION KNOWLEDGE OF ACCOUNTING.TOO MUCH CONCEPTS ARE NOT INVOLVED HERE AND HENCE IMPORTANCE OF FIRST STEP IS MUCH MORE GREATER.