Journalizing: It is the process of recording the transactions of an organization in a chronological order. Based on these journal entries recorded, the amounts are posted to the relevant ledger accounts.
Accounting rules for journal entries:
- To increase balance of the account: Debit assets, expenses, losses and credit all liabilities, capital, revenue and gains.
- To decrease balance of the account: Credit assets, expenses, losses and debit all liabilities, capital, revenue and gains.
Salvage Value: Salvage value refers to that amount of fixed asset which remains unallocated in the form of depreciation at the end of its useful life and can be recovered from resale.
Useful Life: Every asset has a fixed and predetermined life during which it contributes to the production of goods and services in the business. This is known as useful life of an asset.
To Prepare: The

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Accounting Principles volume 2
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