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The lightning speed of computer today and accounting software along it gives has made the act of accounting and bookkeeping very simple, giving an appearance that both are being done simultaneously. For example, the preparation of a sales invoice in a software will automatically update relative general ledger accounts, insert or update the customer’s detailed information, and keep the information for some other use. Journal entries assign the transaction to a specific account and then record the changes based on debit and credit. The information in the journal entries is then shifted to ledger accounts.

The bookkeeping in all is done in four steps:

  1. All the financial transactions are analyzed and then assigned to specific accounts
  2. Writing the original journal entries and check if credit and debit have affected the right account.
  3. Ledger entries are made after the journal entries are finished
  4. Adjustment of entries after each accounting period.