Financial Accounting Session 2

Task 4
1.What are the rules of debit and credit?
- debits and credits are neither good or bad
- debits and credits are not the same as adding and subtracting.

2.How do we journalize a transaction? Why do we journalize transactions?

First we fill in the date, then the accounts and explanation and then if it is debit of
credit.
So we can analyze them.
3.How do we post to the T-accounts? Why do we post to the T-accounts?
Debits on the left and credits on the right.
To create a summary of all transactions that were made within one account, like cash
or inventory.
4.What is a trial balance? How can we use a trial balance to create financial
statements?
A list of accounts and their balances at a given time. Proves the mathematical
equality of debits and credits after posting.
You can get the information needed for the financial statements from the trial
balance. In the trial balance you can find the revenues and expenses for example,
which are needed for the income statement.