Quiz 4: The General Journal and the General Ledger
Journal entries are basically used to record business transactions. It keeps track of each individual event however ledger book keeping gives broad trends and major shifts in funds. In journal, the companies organise the entries by accounts in the order of assets, liabilities, equity, income and expenses. They are then transferred to the ledger. Journal is the first step of the accounting cycle where all the accounting transactions are analysed and record as the journal entries whereas ledger is the extension of the journal entries on the account of which the financial statements of the company is prepared.
Prepare entry When Walmart will purchase transportation equipment: In this transport equipment account is debited of cash account now. Record the entry when w co. purchases transportation equipment on credit: Means now transportation equipment is debited of account payable.
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