Analyzing, Recording, and Classifying Business Transactions

This chapter of the Accounting 101: The Basics course, deals with the first 4 steps of the 9-step accounting cycle.

These steps actually represent the analyzing, recording, and classifying phases of accounting.

This chapter also presents additional accounting concepts such as debits and credits, chart of accounts, journal entry guidelines, trial balance preparation, and correcting entries.

Lesson 1

Understanding and Analyzing Business Transactions

An accounting system must record all business transactions to ensure complete and reliable information when the financial statements are prepared. Before going to the recording process, let us understand business transactions first. Read more..
Lesson 2

Rules of Debit and Credit: Left versus Right

Debit means left and credit means right. Learn the rules of debit and credit in this lesson. Read more..
Lesson 3

The Chart of Accounts – Example and Explanation

Before recording transactions into the journal, we should first know what accounts to use. This is where a chart of accounts comes in handy. Read more..
Lesson 4

Journal Entries: Recording Business Transactions

In double-entry accounting, business transactions are recorded in the journal through journal entries. The journal, also known as Books of Original Entry, keeps records of transactions in chronological order. Read more..
Lesson 5

More Journal Entry Examples

Here are some more sample transactions and their journal entries to help you get used to the recording process... Read more..
Lesson 6

Posting to the Accounting Ledger

In accounting, a ledger refers to a book that consists of all accounts used by a company, the debits and credits to each account, and the resulting balances. The ledger is also known as Books of Final Entry. Read more..
Lesson 7

Trial Balance: Testing the Equality of Debits and Credits

A trial balance is a report that summarizes the balances of the ledger accounts after the posting process. A trial balance is prepared primarily to test the equality between total debits and total credits. Read more..
Lesson 8

Correcting Entries for Errors Detected

When an error is discovered in the accounting records, it should be corrected immediately to prevent the processing of wrong data which will result to unreliable financial statements. This is done through correcting entries. Read more..
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