Accounting System Part 2

Continuing from the previous post on Accounting...

The accounting equation is about a fundamental and an example showing how it remains in balance after each transaction.

The Accounting cycle is the steps, from the initial transaction to preparation of the financial statements and closing entries.

The purpose of the source document showing all examples and their role in the accounting cycle. Journal entries are the basics and the General Ledger is to show how to post transactions to the ledger accounts.

Debits and Credits are the main transactions in an accounting system.

Trial balance is to identify errors in the accounting process and the role of closing entries are also involved for the month end. The financial statements refer to the balance sheet, income statement, statement of retained earnings and cash flow statement.