Recording transactions in accounts must follow certain rules. To begin analyzing the transaction, first determine what items are exchanged. Remember that a transaction is defined as the sale or exchange of goods or services. The next step in analyzing the transaction is to identify the affected accounts. The three categories of accounts in which a business records its transactions are assets, liabilities, and owner's equity. Most transactions benefit—or increase—the business's resources in one area, and create a corresponding decrease in another. But a transaction does not always cause this effect. A transaction can result in just an increase or just a decrease. The final step in the analysis is to determine whether to record the amounts on the debit side or the credit side of the affected accounts.
Modern General Ledgers provide you with the capabilities to enter transactions spanning multiple legal entities using a complex chart of accounts and currency conversions. You can import general ledger transactions directly from your sub-ledgers using the interface provided by the GL System.