*
*Debit
*An entry recording an amount owed, listed on
the left-hand side or column of an account.
*Credit
*The ability to obtain goods or services before
payment, based on the trust that payment will
be made in the future: "unlimited credit".
*
Assets
Increase
+
Debit
(DR)
=
Decrease
-
Credit
(CR)
Liabilities
-
Debit
*
+
Credit
+
Owner’s Equity
Debit
+
Credit
*Any item on the balance sheet
that records changes from that
item.
*LEDGER  Group of accounts
*
*Assets are increased on the debit
side
*Liabilities are increase on the
credit side
*Owner’s Equity is increase on the
credit side
*
*Assets are decreased on the
credit side
*Liabilities are decreased on the
debit side
*Owner’s Equity is decrease on
the debit side
*
*Accounts are increase on the side
they appear in the fundament
accounting equation
Assets = Liabilities + Owner’s Equity
*Accounts are decreased
on the opposite side to
which they appear in the
equation
* https://www.youtube.com/watch?v=DfX_mbbB
sYo
*
*
Date Account Title & Explanation
Sept 18 Alex, Capital (Drawings) - debit entry
Cash- Credit entry
PR
Debit
1 5 0-
Credit
1 5 0-
To Record owner withdrawal
20 Truck
Cash
Bank Loan
To record purchase of Truck
5 00002 0 0 0 03 0 0 0 0-
Date Account Title & Explanation
PR
Journal --> is a daily record of transactions
Must Decide -->
1. which accounts are affected (min 2)
2. If increase or decrease to accounts
3. If debit or credit (must ALWAYS = )
Double entry System of Accounting
For every transaction, you must always
have a min of one debit and one credit
So TOTAL DR = TOTAL CR
Debit
Credit
Date Account Title & Explanation
PR
Debit
Accounting Cycle:
1. Transaction occurs
source document is proof of transaction
2. Journal --> daily record of transactions
"On Account"
i) sale on account - sold good/ services &
get money --> A/R
ii) purchase on account- bought good/services
& didn't pay --> A/P
iii) Received on account $ received from A/R
iv) Payment on account - $ paid to A/P
Credit
*
Transaction No.
1
2
3
Account Names
Cash
Asset
A/R- J. Parker
Asset
Cash
Asset
Supplies
Asset
Cash
Asset
A/P- L.B.
4
5
Drawings (OE)
Liability
Owner's Equity
Cash
Asset
Equipment
Asset
Cash
Asset
A/P- L.B.
6
Account Classification:
Asset, Liability, or
Increase (+) or
Owner's Equity
Decrease (-)
Cash
Revenue
Liability
Asset
Owner's Equity
+
+
+
+
+
+
Debit or
Credit
Amount
DR
300
-
CR
300
-
CR
200
-
DR
200
-
CR
100
-
DR
100
-
DR
250
-
CR
250
-
DR
500
-
CR
125
-
CR
375
-
DR
300
-
CR
300
-
*
Date Account Title & Explanation
Sept 1 Cash
A/R- J. Parker
To record payment by J. Parker
PR
2 Supplies
Cash
To record purchase of supplies for cash
A/P- Little Bros.
Cash
To record payment to A/P
Debit
3 0 0-
Credit
3 0 0-
2 0 02 0 0-
1 0 01 0 0-
Date Account Title & Explanation
4 Flora Siska, Drawings (OE)
Cash
To record owner withdrawal
PR
Debit
250-
Credit
2 50-
5 Equipment
Cash
A/P- Champion Sports
To record purchase of equipment
500-
6 Cash
Revenue (OE) F. Siska, Capital
To record fee for fitness course
300-
1 253 75-
3 00-
Complete Ex. 2 Crooks Garage
p.103 (t), p. 51 (w)
1) Complete transaction analysis
sheet in workbook (p. 51)
2) Use back side of journal paper to
journalize each transaction