Question

me nouncements This is a graded discussion: 5 points possible llabus due Feb 16 at 11:55pm Discussion 2 - Analyzing and Recording Business Transactions Modules Discussions 1. What is the difference between the Journal and the Ledger? Why is each important? 2. Do the terms debit and credit signify increase or decrease or can they signify either? Explain Grades Collaborations Search entries or author Unread Get Tutoring Subscribe

Answer 1

Journal i) between Ee Ledges Difference Basis Journal I meaning The book in which all the transactions are recorded as e when they arise is known as Journal Ledger The book which enables to transfer all the transactions into a seperate account is called Ledger It is the poinciple book. subsidasy What is it It is a book known as Book of original Book of Second entay entry charonological Analytical record Records is gecond process The process of recording transactions is called Journalizing The process of transferring entries from Journal to ledger is called posting gealuentially account wise how transactions are Recorded sides columns defst & Credit must not necessary Narration

Importance of Journal i) A Journal entory is a record of financial able transactions entered into a Journal. hei The Journal details all the financial transactions a of business & makes a note of which accounts is these transactions affect (1) Journal entries provide foundational information for all of business's other financial reports. in each Entry should include date, pasties involved, - debit & credit of at least and one account each, a receipt or check number, nagsation. (N) It is used by Audifors to analyze how financial transactions impact a business. Importance of Ledger I (i) Ledged account keeps a permanent record of - all financial transactions in a classified manner (ii) Ledger shows detailed financial information of business regarding debtors, creditors, assets, income re expense (T) Ledger accounts helps to prepare torial balance. cial Ledget accounts helps to prepare probit &e - loss account (u) Ledger helps to prepare balance sheet with a view to show the financial position of businest.

The team debit ce credit can sige signity either incorrease or decrease. Let us understand the above statement with examples. ~ creditoris account will have credit balance. Debiting . caeditors account implies decrease e crediting creditor account implies increase in balang - debtors account Casset) cwill have debit balance. Debiting detoors account implies increase & crediting debloors account implies decrease in balance Therefore for all accounts having credit balances (ex; liabilities) credit implies increase e debit implies decrease For all accounts having debit balances Cassets) debit implies increase e credit implies decrease Is