Journal

• Journal is the book where business transactions are first recorded in, hence journal is also known as Book of Original Entry
• Journal entries are immutable

From journal, the entries are posted into dedicated accounts (ledgers). Ledger consists of: cash account, sales account, purchases account, wages account, etc.

The closing balances of each accounts were calculated and used to prepare various financial statements.

Concepts

• Trial Balance

• Financial Statements

  _	Income Statement	Balance Sheet	Cash Flow
  Time	Period of time	A point in time	Period of time
  Purpose	Profitability	Financial position	Cash movements
  Measures	Revenues, expenses, profitability	Assets, liabilities, shareholder's equity	Increases and decreases in cash
  Starting point	Revenue	Cash balance	Net income
  Ending point	Net income	Retained earnings	Cash balance

• Wages vs Salary: salaries are fixed (usually specified in the enployment contracts), wages are hourly/daily

Trial Balance Checking

Whenever a ledger is updated, it sends an event that is listened by trial-balance service.

Trial balance service then recalculate the trial-balance to make sure debit and credit amounts recorded in the ledgers are accurate. If and when trial balance is not balanced, notify admin user immediately and daily until they are fixed/balanced out.