balance ledger accounts as required and make transfers to financial statements

In double entry bookkeeping every transaction has two sides: a debit and a credit. Think of it like a seesaw – if one side goes up, the other must go down so the balance stays even. This keeps the accounting equation Assets = Liabilities + Equity in balance at all times.

• Every transaction affects at least two accounts.
• One account is debited (value added) and another is credited (value removed).
• The total debits must always equal the total credits.

1. Identify the accounts involved.
2. Decide which account gets the debit and which gets the credit.
3. Record the amounts in the journal.
4. Post the entries to the ledger accounts.

Journal entry:
Debit Equipment $500
Credit Cash $500

?? The totals match – the trial balance is balanced.

After the trial balance, move account balances to the appropriate financial statements:

• Assets (e.g., Equipment) → Balance Sheet
• Liabilities & Equity (e.g., Cash) → Balance Sheet
• Revenue & Expense → Income Statement (not shown in this simple example)

• Always check that debits = credits for every transaction.
• Remember the accounting equation – it must stay in balance.
• When writing journal entries, list the date, accounts, and amounts clearly.
• In the trial balance, double‑check totals; a mismatch usually means a missing or wrong entry.
• Practice moving balances to the Balance Sheet and Income Statement – this is often a key exam question.