explain how the ledger provides the information needed to prepare the operating statement?

Expert Solution

A income statment is also called as operating statement. In a business, transactions are first recorded in the journal register which is the first point of recording the transaction. From there on, accounts are posted to ledger. A seperate legder is created for each account. The ledger is to be syced with the journal entries when double entry bookkeeping method is used. This primarily means that each entry has two ledger accounts affected, one is debit and other is for credit. These transactions posted to general ledger accounts are than used to generate trial balance which is the statmeent listing all the accounts maintained by the company during the year. From the trial balance the financial statements are prepared. Thus, for preparation of operating statement which is a part of financial statements, first we will have to crerate ledgers and than those ledgers are used to transger to trial balance for vreation of income statements.

ekkarill92 answered 1 year ago

explain how a ledger provides the information needed to prepare an operating statement

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