Recording Business Transactions

Learning objectives

After studying this chapter, you should be able to:

Use the account as the basic classifying and storage unit for accounting information.
Express the effects of business transactions in terms of debits and credits to different types of accounts.
List the steps in the accounting cycle.
Record the effects of business transactions in a journal.
Post journal entries to the accounts in the ledger.
Prepare a trial balance to test the equality of debits and credits in the journalizing and posting process.
Analyze and use the financial results - horizontal and vertical analyses.