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  • Journalizing

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    Terrance Mendoza
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    The document discusses key aspects of measuring and reporting on a company's financial performance. It explains that an income statement shows a business entity's results of operations over a period of time and whether a profit was attained. Net profit or income is frequently used to measure business performance as it is an important function of accounting to compute net income or loss for a going concern. The document also provides an overview of journalizing transactions, ledgers that contain asset and liability accounts, chart of accounts that list account numbers, and the trial balance process of listing account balances to prove debits equal credits and identify errors.

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    The document discusses key aspects of measuring and reporting on a company's financial performance. It explains that an income statement shows a business entity's results of operations over a period of time and whether a profit was attained. Net profit or income is frequently used to measure business performance as it is an important function of accounting to compute net income or loss for a going concern. The document also provides an overview of journalizing transactions, ledgers that contain asset and liability accounts, chart of accounts that list account numbers, and the trial balance process of listing account balances to prove debits equal credits and identify errors.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
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    8 views2 pages

    Journalizing

    Uploaded by

    Terrance Mendoza
    The document discusses key aspects of measuring and reporting on a company's financial performance. It explains that an income statement shows a business entity's results of operations over a period of time and whether a profit was attained. Net profit or income is frequently used to measure business performance as it is an important function of accounting to compute net income or loss for a going concern. The document also provides an overview of journalizing transactions, ledgers that contain asset and liability accounts, chart of accounts that list account numbers, and the trial balance process of listing account balances to prove debits equal credits and identify errors.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
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    FINANCIAL PERFORMANCE

    Measuring and Reporting

     Income Statement - formal statement that shows the results of operations of a business

    entity for a given period of time.

     It shows whether the profit-goal of the company is attained or not.

    PERFORMANCE

     Net profit or net income is frequently used as a measure of the performance of a business

    entity.

     The computation of net income or loss of a going-concern is an important function of

    financial accounting.

    Journalizing

    - Entering transaction data in the journal

    Ledger

    - Group of accounts maintained by a company

    - Contains all the assets, liabilities, owner’s equity

    Chart of Accounts

    - Lists the accounts and the account numbers which identify their location in the ledger

    Trial Balance

    - List of accounts and their balances at a given time

    - Purpose is to prove debit = credits after posting


    - If debits and credits do not agree, the trial balance can be used to uncover error in

    journalizing and posting

    Steps in preparing trial balance:

    - List the accounts titles and balances

    - Total the debit and credit columns

    - Prove the equality of the two columns

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