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W5 - RECORDING TRANSACTIONS 2 - RECORDING TRANSACTIONS 2...

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RECORDING TRANSACTIONS 2
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BALANCING OF ACCOUNTS 1. Leave 1 line under the last entry & draw parallel lines in the amounts columns 2. Add each side of the ledger and calculate the difference. (use separate paper) 3. If the amount of debit exceeds on credit side, enter the difference on the credit side immediately after the last entry on that side. Described as c/d (carried down balance).
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BALANCING OF ACCOUNT 4. Enter the same figure on the opposite side below the parallel line and described as b/d (brought down balance) 5. Enter the total of each side of the ledger account between the parallel lines. These two figures should now be the same.
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PERMANENT ACCOUNT Balance will be bring forward to next accounting period. Category of account: assets, liabilities and equities.
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TEMPORARY ACCOUNT Balance will be closed and bring to income statement. No balance will be bring forward to next accounting period. Category of account: expenses and revenue.
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TRIAL BALANCE
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