Every successful firm in the UAE understands the importance of having a strong accounting procedure in place inside the organization. Financial statements are produced using the accounting cycle.
The company's performance throughout a fiscal period is accurately depicted in the financial statements. The processes in the cycle of Accounting in Dubai assist firms in providing a clear picture of the organization's financial health.
The Critical Steps in the Process of Accounting Services in Dubai
The risks associated with managing the firm can be decreased by following the processes exactly for Accounting Services in Dubai.
- Finding and Analyzing Business Transactions
The first but most important phase in the entire accounting process is to analyze the transactions. The accounts that are impacted by the transactions must be identified by the businesses.
They must refrain from combining personal and professional transactions.
It is essential to make sure that the accounting system contains only commercial transactions.
2. Journal Transaction Posting
Journalizing the transactions is the following stage in the accounting cycle. The outsourced accounting companies in the UAE will make sure that the journal has been updated with all relevant financial data for the company.
The double-entry method of bookkeeping is used for this procedure, and transactions are recorded in debit and credit accounts. The date and description of each transaction are recorded in the journal.
Depending on the technology used by the outsourced accounting company, the journal may be in a book or electronic form.
3. Journal to Ledger Posting
The ledger now receives the financial data that was entered into the journal, including both debit and credit transactions. The ledger, which is also known as the book of final entries, displays the company's accounts and the adjustments made as a result of different business activities.
The cash ledger will receive all debit and credit journal cash transactions.
4. Keeping Track of Altering Entries
Before summing up the accounts in the financial statement, UAE accountants will, at this point, record the adjusting entries to update the accounts. Journalized entries will be made and then posted to the ledger.
5. Constructing the Rebalanced Trial Balance
The businesses must compute a fresh trial balance after the new entries are made to verify that the debits and credits balance out. This is the setting for the company's financial statement preparation, making it a crucial stage in the accounting cycle.
Any inaccuracy found in the adjusted trial balance needs to be fixed right away.
Also, Read About Jaxa is Now an FTA-Approved Tax Consultant in Dubai.
6. Making Financial Statements
Prepare the financial statements next, then the corrected trial balance. The company's financial statements include things like,
- Income Statement
- Cash flow Statement
- Balance Sheet
- Posting closing entries.
The temporary accounts are reduced to zero or closed as soon as the accounting period comes to a conclusion. These consist of withdrawal, income, and expense accounts.
It should be remembered that the temporary accounts are the ones for which closing entries are made, not the permanent accounts or the balance sheet accounts.
7. Trial Balance After Closing
The book now only contains permanent entries like assets, obligations, and owner's equity because the temporary accounts have already been closed. This procedure guarantees that income and spending accounts are properly closed.
Additionally, it seeks to maintain a balance between the overall credit and debit. The corporations must find and fix any faults in the book once more.
Consult with One of the Top Accounting Firms in Dubai & UAE
Companies are encouraged to hire the services of the top accounting & bookkeeping businesses in the UAE in order to comprehend and correctly carry out all the processes in the accounting cycle. A reputable accounting firm in Dubai, United Arab Emirates, called Jaxa Chartered Accountants, has assisted companies in a variety of industries in keeping their books of accounts compliant and up to date with national and international laws.
The Chartered Accountants on the trained and experienced team make sure that the financial reports and statements of businesses adhere to the International Financial Reporting Standard (IFRS). Being among the best Accounting Firms in Dubai, we are dedicated to addressing important problems the company has, such as cash flow management and planning & forecasting of budgets, and so assisting in the expansion of the company.
Consult us today to outsource your services for Accounting in Dubai.