Accounting Self Study Guide for Staff of Micro Finance …

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Accounting Study Guide. Lesson 5. The format used to record increases and decreases in the Balance Sheet or. Income Statement items is called a Ledger …

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Accounting - Self Study Guide for Staff of Micro Finance Institutions
LESSON 5
Summarizing Changes in Financial Position
OBJECTIVES The purpose of this lesson is to show how to summarize the transactions which were recorded during the last session. The General Ledger and ledger accounts are explained leading to account balances and finally a Trial Balance. From the Trial Balance, adjustments are made resulting in final account balances which are transferred to the corresponding accounts on the financial statements.
You will develop a good understanding of how transactions move from individual records to the creation of the Balance Sheet and Income Statement. Topics include:
?the General Ledger
?Ledger Accounts
?Account Balances
?Trial Balance
?Adjustments
In the last lesson, we covered journal entries and how they are recorded in the General Journal. From the General Journal, the information is consolidated and entered into ledger accounts which make up the General Ledger. This is the next step in the process of creating financial statements.
This lesson covers the steps from the General Journal to the General Ledger, the trial balance, adjustments, and finally the creation of the Balance Sheet and the Income Statement.
The General Ledger
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