Transactions are recorded when payments are made or cash is received. 

Transactions are recorded when cash is earned or when an expense is incurred; not necessarily when cash is received or expenses are paid off. 

The way the accounting transactions are recorded can change the way a company's financial statements look.

Create journal entries of all transactions made within the accounting period. 

Shows transactions based on the accounts they were made in, and not in chronological order. Used to separate the data into sections. 

Lists the ending balance of each account by the end of the accounting period date. 

Based on the totals adjusted from the trial balance sheets, final financial statements are prepared at the end of the accounting period.