Journal entries are essential accounting records that businesses use to prepare annual and quarterly financial statements. A complete financial statement undergoes several journal-entry steps. I researched the journal entry techniques to identify the primary aspects that an accountant should observe.
The journal entry preparation process appeared challenging for me. However, I found information from www.gcumedia.com that helped me to conceptualize the journal-entry process faster. First, an accountant should create a journal entry with the date, explanation, debit, and credit sections. Second, transactions in the narrative form are recorded in the journal entry. Further, transactions are recorded according to dates in descending order (Student Success Center (a), 2020). Transactions that have compound entries are recorded and journalized appropriately. After all the transactions have been logged and journalized, the accountant will have a general journal. Information from the general journal is then transferred to the general ledger. The data is then used to prepare a trial balance. Hence, journal entries are used to develop general ledgers that generate trial balances.
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I also struggled with grasping how financial statements are prepared. However, I found well-explained data from www.gcumedia.com that helped me understand the financial statement preparation process faster. I learned that organizations use the trial balance to prepare financial statements. Adjustments of the trial balance elements are then performed, and the new figures posted in an adjusted trial balance (Student Success Center (b), 2020). Organizational financial statements are then prepared using data from the adjusted trial balance. The organization prepares the income statement, balance sheets, and statement of retained earnings. Businesses should finally close their entries after the preparation of the financial statements and record the data in a post-closing trial balance. Hence, the trial balance is used to design a firm’s financial statements. Thus, I conquered my challenges of understanding journal entry and financial statement preparation techniques through reading data from www.gcumedia.com .
References
Student Success Center (a). (2020). General journal. Retrieved from https://www.gcumedia.com/lms-resources/student-success-center/v3.1/#/media-element/CCOB/B28778BB-28A3-E911-B9BA-005056BD1ABC
Student Success Center (b). (2020). Adjusting entries. Retrieved from https://www.gcumedia.com/lms-resources/student-success-center/v3.1/#/media-element/CCOB/408EFAA7-0CDA-E711-8D64-005056BDD6DE
