W4: Preparing general journal entries

Question 1

How to record transactions?

Answer 1

Use a general journal. It has various benefit:
* Complete record of all transactions
* Presented in chronological order (i.e. date order)
* Useful for locating and reducing errors as debits and credits are shown together (i.e. balance shown)

Question 2

Elements of a general journal

Answer 2

1. Date
2. Accounts impacted
3. Account number
4. Debit value(s) (top left)
5. Credit value(s) (bottom right)
6. Narration under each transaction

Question 3

What is Chart of accounts?

Answer 3

Lists all the accounts that a business uses, along with their account number

Categorise into 2:
* Balance sheet accounts - ALO
* Income statemetn account - IE