Reference no: EM13387398

1. Describe what is meant by transaction analysis.

2. Reply to this response in format of conversation. This is a class discussion/class participation post. It should be whatever your thoughts or opinions are about what was stated or any additional information that you can add on to the post in order to carry on the discussion:

The accounting cycle starts with recognizing all transaction that will have a financial impact on the company. The organization will be keeping a summary of all events and transactions that will result in any operation of the company. All events and transaction that were created, will be recorded on a journal entries that will show two accounts (one being debits and one being credits). Information that has been entered in the journal book will need to be, entered into the company general ledger. The general ledger shows the changes made in each account in past transactions and the current balances. A trail balance will need to be prepared for the debits and credits that was made on the accounts. The total debit must equal to the total credits in order for the account to have a positive balance. When preparing the trail balance, errors such as double posting or not recording a transaction could lead to negative balance. Once accounts have been up-dated with the debits and credits, the financial statement will be ready to be prepared. The financial statement should be made to show the income statement, change in equity, the balance sheet, cash flows, and the notes to financial statements.