Accounting Operations Summary

1123 Words Feb 1st, 2018 5 Pages
The general journal is a permanent book used by accountants to record chronological business transactions by a company. Journal entries are always made in the journal book first rather than posting transactions directly to the ledger. Once a journal entry is established in the form of credits and debits, the corresponding information is posted to the relevant account in the ledger. The chart of accounts is a name and numbering system for accounts composed of several category groupings. The chart of account is comparable to what the table of content would be for a book. The accounts are established based on the different types of business transaction the company is engaged in. They appear in the general ledger in the order they appear on the financial statement. For example, a cash account would be the relevant account to post the effects of a journal entry that affects the company’s cash assets. It would be the first account in the ledger. The combination of all of these accounts makes up the general ledger. The general ledger is a summary of the company’s financial transactions.
Describe the act of posting a transaction from the general journal to the ledger. What difficulties could arise if no cross-indexing existed between the general journal and the ledger accounts?
After the journal entry is created, the supporting entry is posted on the…