Analysing business transactions

4 important questions on Analysing business transactions

What is a transaction?

A fiscal event that influences the financial situation of an organisation

What is a ledger account?

An account that keeps track of all the transactions that have affected an account on the income statement.

What is a journal entry?

Shows which accounts are involved in a transaction, and by which amount they increase or decrease. The journal entries are summarised in the ledger account
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What is the trial balance?

An intermediate station, which includes all the accounts that will eventually be put on the balance sheet and the income statement.

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