Misty Charnesky-Journalizing, Posting, and Preparing a Trial Balance Part D

Misty Charnesky-Journalizing, Posting, and Preparing a Trial Balance Part D

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Running head: JOURNALIZING, POSTING, AND PREPAIRING A TRIAL 1 Journalizing, Posting, and Preparing a Trial Balance Part D Misty Charnesky XACC/280 August 7, 2011 Mark Bull
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JOURNALIZING, POSTING, AND PREPAIRING A TRIAL 2 Journalizing, Posting, and Preparing a Trial Balance Part D The goal of financial reporting is to show not only the money coming in but also how much of that goes back out of the organization. We want to ensure that finances are balanced which means that debits and balanced are equal. To do this we use the equation of; assets = liabilities + stockholder equity. This equation breaks down to credits and debits in which we can make a T table with debits on the left and credits on the right. This way we can easily see exactly how much is actually going out of the organization or if we are over budget. Recording is easy to do; first, to be done is gather all the financial transactions. After you have the information there is only to write the credits and debits on the chart.
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Unformatted text preview: The hard part is to ensure what is a credit and what is a debit. In the case of the stockholders investing in stock there was a credit and a debit. Credits are money amounts that the company owns or is owed, debits are money paid out of the company for such as rent, supplies, and salaries. Each step supported the principles of accounting as you find out exactly the monetary amounts of business transactions. Some transactions end up with the company owing money (debits) and other transactions end as assets (credit). When looking at the final financial report it is noticed that money going out is more than what is coming in it proves that the company is putting itself into debt. Both figures should be equal or there should be an excess profit if the firm is paying out less than they are taking in. JOURNALIZING, POSTING, AND PREPAIRING A TRIAL 3...
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Misty Charnesky-Journalizing, Posting, and Preparing a Trial Balance Part D

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