Transactions are recorded in a journal to provide a chronological record of all its activities in a business.
- With our knowledge of the different types of accounts,…assets, liabilities, and owner's equity,…and the use of the terms debits and credits,…debit means left, credit means right,…we are now ready to actually…record the effective transactions.…The second step in the accounting cycle…is to record the results of transactions in a journal.…Journals provide a chronological record…of all transactions of a business.…They show the dates of a transaction, the amounts involved,…and the particular accounts affected by the transactions.…Sometimes,…even a detailed description of the transaction is included.…
This chronological recording of transactions in a journal…provides a company with a complete record of its activities.…If amounts were recorded directly in the accounts,…it would be difficult, if not impossible,…for a company to trace a transaction that occurred,…say, six months previously.…Small companies, such as a locally-owned pizza restaurant,…may use only one journal called a general journal…to record all transactions.…
- Identify how a balance sheet reflects the accounting equation.
- Name the account where debits are increases and credits are decreases.
- Define a journal.
- List the three things, in order, that you must address when making journal entries.
- Explain the function of financial statements that is most important for entrepreneurs.
- Assess the purpose of a trial balance.
Skill Level Beginner
1. Review of the Financial Statements
2. Fours Steps in the Bookkeeping Process
3. How Transactions Affect the Accounting Equation
4. The General Ledger
5. Illustration of the First Three Steps in the Accounting Cycle
The role of computers3m 44s
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