Accounting Terminology An account is a detailed record of the changes in a particular asset, liability or owners' equity. The ledger is a book containing details of all accounts. The journal is a chronological record of the transactions of the business. A list of all accounts with their balances from the ledger is the trial balance . Doube-Entry Accounting There is always a giving side and a receiving side and at least two accounts are affected by any one transaction. Examples of Double-Entry Accounting/Bookkeeping: Buy Land for Cash, $100,000: Giving Cash, Receiving Land Sale Inventory on Account, $20,000: Giving Inventory, Receiving an Account Receivable Purchase Equipment for Cash, $250,000: Giving Cash, Receiving Equipment The t-account is where transactions from the journal are posted. (see video on Rules of Debits and Credits for more on t-accounts and example transactions) Normal Balance of Accounts Accounts are said to have...
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