Day 2: Analysing and recording transactions
Key terms and concepts
• Journal: where we first enter a transaction; it is then transferred to the general ledger.
• Posting: the term used when we transfer an amount from the journal to the general ledger.
• General ledger account: more commonly known as ‘ledger account’, holds the records of the transactions that relate to the one chart of account item.
• A single general ledger account holds the details of one classification item as per the chart of accounts. For example, the Electricity account holds all of the details of the payments made for your business’s electricity usage.
• General ledger accounts hold the details of the entire year’s transactions. They are closed off at the end of each ...