Accounts, Journals, Ledgers, and Trial Balance Financial Accounting
Because each transaction is initially recorded in a journal rather than directly in the ledger, a journal is called a book of original entry. The statement of financial position reports three main sections or elements called assets, liabilities and equity, while the income statement reports two main elements, namely income and expenses. For every financial transaction that is recorded in the accounting system of the company, the amounts of these financial statement elements either increase or decrease depending on the…
