Lesson 5: Summarizing Changes in Financial Position
The purpose of this lesson is to examine how the various activities of the organization’s credit operations are recorded. Double-entry accounting is discussed and the methods of recording various transactions are presented. Voucher preparation and journal entries are explained for both Balance Sheet accounts (Assets, Liabilities and Equity) and Income Statement accounts (Revenue and Expenses). In addition, the importance of the Cash account and corresponding periodic bank reconciliations are discussed.
The purpose of this lesson is to show how to summarize the transactions which were recorded during the last lesson. The General Ledger and ledger accounts are explained leading to account balances and finally a Trial Balance. From the Trial Balance, adjustments are made resulting in final account balances which are transferred to the corresponding accounts on the financial statements.
You will develop a good understanding of how transactions move from individual records to the creation of the Balance Sheet and Income Statement. Topics include:
- the General Ledger
- Ledger Accounts
- Account Balances
- Trial Balance
- Author/editor:Ledgerwood, J.; Moloney, K.
- Type Lesson
- Year of publication1996
- Keywords Bank Reconciliation, Mfi Management
- File Lesson 5: Summarizing Changes in Financial Position