1
Q
What is an Account?
A
- Any item on financial statement that affects the accounting equation
- Ex: Bank, A/R, supplies, Land, A/P, Capital, etc.
- Each item gets a separate account
2
Q
What is a Ledger?
A
- A group of accounts
- Different types: T-Accounts, Balance Column Accounts
3
Q
How to Create a Ledger
A
- Each account assigned a “T” with the name of the account written on top
- Records the $ amount from the balance sheet
- The side of the “T” where you will record the dollar amount is based on the accounting equation
- Assets: Left
- Liabilities: Right
- Owner’s Equity: Right
- Final amounts in T-Accounts used to create a new, updated balance sheet
