Voucher is a document in accounting containing the details of a financial transaction. Examples include sales invoice, purchase invoice, pay-slip, rent receipt & so on. In a journal, several entries are recorded, each of which is unrelated to the other. To know the total effect of all the transactions, each journal entry must be moved transferred to the account it relates to.
It is a statement of transactions affecting any particular asset, liability, expense or income. A ledger is the book in which all the accounts are maintained. A chart of accounts is a list of all account titles used by an organisation. The chart of accounts of the business shows the categorisation & grouping of its accounts.
Posting is the process by which information about transactions is transferred or moved to an account.
A regular period of time, such as a quarter or a year, for which a financial statement is generated is called an accounting period.
After posting the accounts in the Ledger, a statement is prepared to show separately the debit and credit balances. Such a statement is known as Trial Balance. It may also be prepared by listing each and every accounts and entering in separate columns the totals of the debit and credit sides. Whichever way it is prepared, the totals of the two columns should agree. An agreement indicates reasonable arithmetical acoustical of the accounting work. If the two sides do not agree, there is definitely some error. We should remember that equalizing the two sides of a Trial Balance is not the sole and conclusive proof of the complete correctness of accounting work.
A Trail Balance is a list of accounts showing debits balances and credit balances. If the Trial Balance agrees it proves:
A Trial Balance facilitates the preparation of final accounts, i.e., the Trading Account, the Profit and Loss Account and the Balance Sheet.
There are two methods of preparing a Trail Balance:
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