Oregon Construction Contractors (CCB) Practice Test

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What is the first step in the accounting process for a construction business?

Preparing financial statements.
Bookkeeping.
Analyzing expenses.
Conducting audits.

The correct answer is: Bookkeeping.

The first step in the accounting process for a construction business is indeed bookkeeping. This foundational step involves systematically recording all financial transactions, which lays the groundwork for all subsequent accounting activities. Bookkeeping ensures that every purchase, sale, expense, and income is accurately captured and organized. Once bookkeeping is established, it enables the construction business to track financial performance and prepare financial statements. Analyzing expenses and conducting audits are further steps that rely on the accurate records established during bookkeeping, making it essential to have a reliable bookkeeping process in place before any other accounting activities can effectively take place.