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General Accounting Discussions: Question of where it all starts

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    I am trying to understand the aspects of accounting in 2 forms....(1)for accounting for property management as it plays a role in trust accounting and (2) the way accounting functions from the business side of it.

    THE QUESTION IS....I pulled out all of my old accounting books from the classes in college andI am confused on how it all starts... How does the Chart of Accounts, Ledgers, and Journals all come into play??? How do you set it all up to start the process if you are doing it without software or if you just wanted to know how to do it yourself?

    I was under the impression that you need to set up the chart of accounts and then everything is posted into your journals. From there you create your multiple ledgers you would need from your journal entries. Then from there you would get your "balance sheet" and "profit and loss statement"....How close am I??
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    Well what you are asking is kind of a big question, but I will try to give a very very brief overview. First you need to have a chart of accounts. Once you have that, it is possible to make general journal entries. Those general journal entries are then posted to the general ledger (T-Charts). From this you will be able to create an unadjusted trial balance. Make your adjusting entries, then you have your trial balance. From the expense and revenue accounts you can create an income statement. The income statement will flow into the statement of retained earnings. And whala! You now have an income statement, statement of retained earnings, and balance sheet. Again this is really generic and I am sure I am missing many intricacies, if you have further and more detailed questions, post them to the forum and myself or someone else may be able to help.

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