Journal Entries

First things first is i need to describe the journal entry. The journal
entries like stories in what we called money book for a companies. It's
like taking notes every time we're dealing with the money. Like we're
buying some stuff and getting paid off. The company or person will right
it down in this called Journal Entries. Each entry tells a little story about
what happened and how it affected the company's money. And we will
gonna describe what's the rules of each part of the journal entries. The
First you can see on Journal entry is "Date" and you can see that all
Journal entry starts with the Date. It is to show when the money or
event happened. Second is account. There are the two accounts that
involved in all entries.

The other is where the cash comes from. And other is where it goes or
comes from. Third we can also see the Debit and Credit. It is to depend
on whether money is coming in or going out. Debits described for
increase asset accounts, while credits is to decrease them.

Fourth one, is Cash or Amount. It is the money that involved. It is

written beside the accounts.

The last one is the Description. We called it "to record" It explains what
the transaction is all about. It's like Each entry tells a little story about
what happened and how it affected the company's money.

General Ledger
The general ledger is like the financial infrastructure of the company.
Each transaction impacts at least two accounts, reflecting the double-
entry accounting system's. It records all transactions, making them into
some accounts such as assets, liabilities, revenue, and expenses. And
each transaction affects at least two accounts. It's having a record
keeping. In that way you have to record all financial transactions,
providing a detailed of a company's financial activities. Third there's a
forms the basis for generating financial statements like the income
statement, balance sheet, and cash flow statement, which are essential
for investors. General ledger need to collect each other accounts
money. Why? By collecting money from each account, the general
ledger ensures that every financial transaction is recorded and counted.
Ensuring that money is collected from all accounts helps ensure that a
transactions are not having errors, from the financial records. In all

recording the ledger is essential for maintaining accurate financial

records, ensuring compliance, facilitating decision-making, promoting
transparency, and supporting financial audit.

The general ledger organizes financial transactions into individual

accounts to provide a detailed of a company's financial activities. the
general ledger plays a pivotal role in the financial management of a
company. By recording transactions, generating financial statements,
ensuring accuracy and compliance, facilitating decision-making,
promoting transparency, and supporting audits.

Trial balance
The trial balance is a list of all the accounts in the general ledger and
their balances. It's used to check the accuracy of the ledger by ensuring
that the total debits equal the total credits. This helps detect errors in
recording transactions before preparing financial statements. I need to
explain how trial balance works. You need first to write down all the
money your company received, like from selling products or buying
products. All the accounts is you need to collect the money from
General ledger, you need to tot

al that. Like Cash. Nor should i say the Assets, liabilities, revenue, and
expenses. You write down all the money your company spent or used.
So if you total all. You need to separate the Debit and Credit. Like every
time your company gets money, you write it down on the left side. And
every time your company spends money, you write it down on the right
side. If you receive money or the company. For example you are the
company. (As teacher Apple said) You'll right the money on the left side
which is the Debit. And if you spend money that's the Credit and you'll
right the money on the Right side. Now, The trial balance serves as the
foundation for creating financial statements like the income statement
and balance sheet. If the trial balance isn't balanced, it could lead to
error transactions in all statements. Balancing the trial balance is a
critical step in the accounting process to maintain the integrity of
financial information and facilitate.

Then, we check if the total of the debits equals the total of the credits.
If they match, it means we've recorded everything accurately, like
balancing a scale. If they don't match, it signals that there might be a
mistake in recording the transactions, and we need to investigate to
find and fix it.

Cost of Goods Sold.

In the total cost incurred or we Called Cost of Goods Sold. Is to produce

or purchase goods that have been sold by a company during a specific
period. It includes all the direct costs associated with making or buying
the products that are sold to customers. This Cost of Goods Sold is a
really important for businesses because it helps determine their gross
profit, which is the difference between revenue from sales and the cost
of goods sold. A lower Cost of goods sold, means higher gross profit,
which indicates better efficiency in production or proffer processes. The
Cost of Goods Sold is having a Formula which is the "Beginning
Inventory + Purchases during the period - Ending Inventory." The
Beginning Inventory refers to the value of inventory at the beginning of
the accounting period. while Purchases represent the cost of additional
inventory purchased or produced during the period. Ending Inventory is
the value of inventory remaining at the end of the period or end of the
month salaries. Cost of goods sold affects a company's gross profit,
which is the difference between revenue and Cost of goods sold
understanding and managing this kind of topic, effectively can
significantly impact a company's profitability. Understanding this cost
structure of goods sold enables companies to make informed decisions
that optimize profitability and competitive in the market. the Cost of
Goods sold is crucial for accurate financial reporting and decision-
making. It is a key component in determining a company's profitability
and can also help in pricing strategies, inventory management, and
evaluating the overall performance of the business. By understanding
and managing the Cost of Goods Sold, companies can improve their
operational efficiency and financial wellbeing.

Income statement.

An Income statement, this also known as a profit and loss statement.

this financial document that shows a company's revenues and expenses
over a specific period, usually a month, or even a year. It's the main
purpose is to report how much money a company made or lost during
that time.

The income Statement starts with the company's revenues, which are
the total amount of money earned from selling goods or services. These
revenues include sales, and other income sources.this statement is still
connected to Cost of Goods sold. which topic represents the direct
costs associated with producing or purchasing the goods that were
sold. Adding the Cost of Gold Sold from revenues gives the gross profit,
which is the amount of money left after covering the costs of goods
sold. And then After calculating gross profit, the income statement lists
operating expenses, which are the costs incurred to run the day to day
or time to time working operations of the business. These expenses
include salaries, rent, utilities, and other overhead costs. The income
statement also includes non-operating income and expenses, such as
interest income, and expense,

The positive net income indicates that the company made a profit,
while a negative net income indicates a loss.

In this income statement deducts income taxes to calculate the net

income, which is the company's bottom line profit or loss after
accounting for all revenues, expenses, and taxes. The income statement
provides insights into a company's financial performance. including it's
cost management, and overall profitability. It is used by investors,
creditors, and other stakeholders or companies to evaluate the
financial health and make informed decisions about investing or lending
money to the company.

Balance sheet

A balance sheet is like the financial snapshot of a company. is like a

quick picture of the company's financial situation at a specific moment.
shows what the company owns what it owes and what's left over for
the owners.

It's made up of three parts like assets, liabilities and owner's equity. The
asset is like what the company owns. Cash inventory equipment and
buildings. And Liabilities are what the company owes. And the other
which is Owner's equity is what's left over for the owners after adding
liabilities from assets.

This means that the total value of the company's assets should be equal
of its liabilities and owner's equity.

The current asset Items expected to be converted into cash within one
year like cash accounts receivable and inventory. liabilities debts due
within one year, such as accounts payable and short term loans. And
owners equity the initial investment by the owners. Its always the
Assets = Liabilities + Owner's Equity. It splits the company's belongings
into two what it has asset and what it owes liabilities. giving a clear of
its financial muscles and debts. One side lists all the things a company
owns called assets. These can be like cash, buildings, equipment, and
even stuff that people owe the company. The other side lists what the
company owes, and it's called liabilities. These are like bills the
company has to pay loans it took out and any money it owes to
suppliers or employees.

Closing entries
The purpose of closing entries is to prepare the accounts for the next
accounting period by starting with a clean slate. This process helps to
separate the current period's transactions from those of previous
periods, providing a clear picture of the company's performance. It has
a closing revenue accounts. Revenue accounts, such as sales revenue
and service revenue, are closed by debiting each other revenue account
for its balance and crediting the income summary account. Expense
accounts, such as salaries expense and utilities expense, are closed by
debiting the income summary account and crediting each expense
account for its balance. The balance in the income summary account,
which represents the net income or loss for the period, is transferred to
the retained earnings account. If the company has a net loss, the
income summary account is debited and retained earnings is credited.
This balances are transferred to the appropriate permanent accounts.
This process ensures that the financial statements accurately reflect the
company's performance for the period and prepares the accounts for
the next accounting period. In all. Closing entries are part of the
accounting cycle and are performed at the end of an accounting period
to reset temporary accounts, such as revenue and expense accounts, to
zero.
Post - Closing Trial Balance.

The post-closing trial balance is a tool used in accounting to ensure that

all temporary accounts have been properly closed at the end of an
accounting period. This Post-closing trial balance only includes
permanent accounts, such as asset, liability, and equity accounts. By
listing only permanent accounts, the post-closing trial balance helps
accountants verify that the closing entries have been correctly recorded
and that the balances of the permanent accounts.

Once the closing entries have been made and the post-closing trial
balance has been prepared, the accounts are ready to start the next
accounting period with a clean slate. The post-closing trial balance
provides the basis for preparing financial statements, such as the
balance sheet and income statement, for the next accounting period.
this accounting cycle its helps to ensure the accuracy of financial
records and prepares the accounts for the next accounting period. By
listing only permanent accounts.