4. Summarizing Transactions: From the Journals to the Balance Sheet
Chapter 3, “Valuing Inventories for the Balance Sheet,” covered the topic of inventory valuation in detail. The various methods discussed there are needed to fill in the current assets section of the balance sheet. This chapter focuses on recording transactions in journals, cataloging transactions in ledgers, and summarizing the information in the balance sheet.
Following is the basic structure of a balance sheet:
• The Assets section consists of the company’s current assets (typically including cash, accounts receivable, inventory, ...