Intermediate Accounting For Dummies

Chapter 4

Reviewing the Accounting System

In This Chapter

Reviewing accounting terms

Understanding the fundamental accounting equation

Walking through a trial balance

Becoming familiar with journals and ledgers

Writing journal entries

Adjusting, closing, and reversing entries

There’s no getting around it: you must have a system in place to collect financial information in order to effectively and efficiently produce accurate financial statements. This process of collecting, sorting, and entering accounting data into business accounting software is called the accounting cycle. It’s perhaps not the most stimulating of activities, but following a systematic accounting cycle helps reduce errors and provides a consistent approach to business accounting.

In this chapter, the first step is to get up to speed on the language of accounting. Feeling a little hazy on whether you debit or credit ...