An accounting journal is prepared for each financial transaction. Next is the process of posting journals to ledger accounts.
The journal specifies the ledger accounts to be adjusted because of a financial transaction. This journal has items that have equal debit and credit totals.
The journal gets ‘posted’ to each ledger account affected by the transaction. The dollar amount is either debited or credited to each ledger account.
A summary of the ledger account balances at the end of the accounting period is called the Trial Balance.
Finally, financial statements are prepared from this information.
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