In previous article, we discussed the funciton of journal which we can calculate profit / loss in balancing journal. In the daily business accountants accumulate journals. Finally we can grabe the outline of business on daily basis or monthly basis. If you can, I can say you are the master of accounting.

Let’s look into how we can do it. First step is to confirm the calculation rule of accumulated amount in journals.

So far I didn’t mentioned clearly which accounts belong to left side or right side.

Asset and loss belong to left side and Liability , profit and Equity to right side. Equity will be discussed in future articles.

Items of left hand side are summed up when they are booked in left side and deduced in right side. As per right side vice versa.

At the end of each business day or month, accounts post all the journals and fix the both amount of items on left and right sides and then they close books.