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    Basic Accounting

    Uploaded by

    Kobi Garbrah
    The document discusses basic accounting concepts and principles. It introduces the accounting equation that assets must equal liabilities plus owner's equity. It explains debit and credit rules, including that debits go on the left side and credits go on the right side of "T" accounts. It also describes how to increase and decrease asset, liability, and owner's equity account balances using debits and credits. The document notes that learning these fundamentals helps understand accounting software programs and how the chart of accounts fits into the basic accounting equation.

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    Attribution Non-Commercial (BY-NC)
    Download as PDF, TXT or read online from Scribd

    Basic Accounting

    Uploaded by

    Kobi Garbrah
    127 views9 pages
    The document discusses basic accounting concepts and principles. It introduces the accounting equation that assets must equal liabilities plus owner's equity. It explains debit and credit rules, including that debits go on the left side and credits go on the right side of "T" accounts. It also describes how to increase and decrease asset, liability, and owner's equity account balances using debits and credits. The document notes that learning these fundamentals helps understand accounting software programs and how the chart of accounts fits into the basic accounting equation.

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    basic accounting for beginers

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    The document discusses basic accounting concepts and principles. It introduces the accounting equation that assets must equal liabilities plus owner's equity. It explains debit and credit rules, including that debits go on the left side and credits go on the right side of "T" accounts. It also describes how to increase and decrease asset, liability, and owner's equity account balances using debits and credits. The document notes that learning these fundamentals helps understand accounting software programs and how the chart of accounts fits into the basic accounting equation.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    127 views9 pages

    Basic Accounting

    Uploaded by

    Kobi Garbrah
    The document discusses basic accounting concepts and principles. It introduces the accounting equation that assets must equal liabilities plus owner's equity. It explains debit and credit rules, including that debits go on the left side and credits go on the right side of "T" accounts. It also describes how to increase and decrease asset, liability, and owner's equity account balances using debits and credits. The document notes that learning these fundamentals helps understand accounting software programs and how the chart of accounts fits into the basic accounting equation.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
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    19/12/2013

    Basic Accounting

    Accounting

    Accounting Basics

    Accounting

    Let's spend a little time discussing why we need to know this simple equation and begin to understand how it works.

    This is The Basic Accounting Equation

    A s s e t s=L i a b i l i t i e s+O w n e r ' sE q u i t y


    W h a tac o m p a n yo w n sm u s ta l w a y se q u a l( = ) w h a ti to w e st oi t sc r e d i t o r s p l u s( + )w h a ti to w e st ot h eo w n e ro ro w n e r s

    The DEBIT - CREDIT Rule Each of the accounts in a Ledger will have a Debit Column and a Credit Column. Debits and Credits increase or decrease amounts on a ledger page account without having to use a plus (+) or minus (-) sign. No matter what - always DEBIT on the LEFT and CREDIT on the RIGHT. This basic rule never changes. _____________________________________________________

    "T" Accounts
    Notice in this graphic that DEBIT is on the LEFT and that CREDIT is on the RIGHT in each of the "T" s.
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    Basic Accounting

    Again, always DEBIT LEFT and CREDIT RIGHT

    "T" Accounts Expanded


    Now that we know that we always debit on the left and credit on the right we can begin to discuss how we INCREASE and DECREASE the balances in accounts. The ( + ) sign means INCREASE and the ( - ) sign means DECREASE. Note that when you cross over the ( = ) sign you reverse the way accounts increase and decrease.

    Assets

    To INCREASE ( + ) the balance in Asset Accounts you DEBIT To DECREASE ( - ) the balance you CREDIT To INCREASE the balance in Liability Accounts you CREDIT To DECREASE the balance you DEBIT To INCREASE the balance in Owner's Equity Accounts you CREDIT To DECREASE the balance you DEBIT

    Liabilities

    Owner's Equity

    T's within T's

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    For Single Proprietor and Partnerships

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    Basic Accounting

    For Corporations

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    The next step is to fill in these Ledger pages using the amounts in the General Journal and show how Posting to Ledger pages is done.

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    Thus

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    Next we will make a Trial Balance to be sure that all the different accounts are in balance.

    Thus

    The concepts learned here will help you understand what's happening behind the scene when using various accounting software programs. The Chart of Accounts is simply a list of accounts. For now, accounts in the Chart of Accounts can ultimately be plugged into the Basic Accounting Equation.

    A s s e t s=L i a b i l i t i e s+O w n e r ' sE q u i t y

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    _________________________________________________ Comments:

    hb

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