What is an accounting transaction?

What is an accounting transaction?

An accounting transaction is a record of financial movement. This transactions occurs when a source document is presented and then accordingly recorded as an entry. In double entry accounting two entries will need to be generated (one debit Dr and the other credit Cr).

Each of the source documents will be coded according to the details. The date, account, narration and amount will be recorded against the accounting journal.

What is an accounting general ledger?

What is the General Ledger in accounting?

As the name mentions this is a 'general' ledger. A ledger is basically two columns of transactions that is listed down the page. This is occasionally referred to as a T account - where the T represents the layout of the columns those on the left hand side and those on the right hand side.

What is an accounting journal?

What is an accounting journal?

An accounting journal is an area where information is recorded in journal format for particular entries. Think of it as a diary of financial events where you can see exactly what transpired at any particular time. These records are normally referenced to source documents and accounting ledger accounts.

In general a journal entry would include:

What is a debit in accounting?

What is a debit in accounting?

What is a debit you may ask? First lets clear the air about debits in accounting and debit cards. While there can be similarities drawn I would ask you to forget what you know about debit cards while reading the below.

What is a credit in accounting?

What is a credit in accounting?

What is a credit you may ask? First lets clear the air about credits in accounting and credit cards. While there can be similarities drawn I would ask you to forget what you know about credit cards while reading the below.

What is an accounting source document?

Source Documents

A source document is an original record containing financial information recorded against an organisation.

Depending on the type of document the information recorded it should include the document date, total amount, and a description of what the document was used for. You will have more details on the documents such as on an invoice for example, which may or may not be relevant for accounting purposes but will be relevant for auditing purposes.

Examples of source documents include:

What is accounting?

What is accounting?

Accounting is simply the measure, process and financial language of various organisations that perform financial transactions. An organisation in this reference is a legal entity from an economic standpoint. This 'entity' includes people who need to report their income and taxes, companies and organisations who provide products and services, trusts, non-profit organisations and so forth. I'll just refer to these entities as organisations for consistency.