Increases and Decreases in the Accounts Accounting Stockholders Equation: Assets Liabilities Equity Rules of Debit and Debit Credit Debit Credit Debit Credit Credit Task Team of FUndaMientalactoUntING Business Sehool. Sun Yatsen niversity
11 Increases and Decreases in the Accounts Accounting Equation: Assets = Liabilities + Stockholders’ Equity Rules of Debit and Credit: Debit + Debit – Debit – Credit – Credit + Credit +
Rules of debit and credit Air sea received s50,000 and issued stock. Stockholder Assets Liabilities+ Equity ash Common stock Debit Credit or for Increase, Increase 50.000 50.000 Task Team of FUndaMientalactoUntING Business Sehool. Sun Yatsen niversity 12
12 Rules of Debit and Credit Air & Sea received $50,000 and issued stock. Assets = Liabilities + Stockholders’ Equity Debit for Increase, 50,000 Credit for Increase, 50,000 Cash Common Stock
Rules of debit and credit Air sea purchased land for $40,000 cash. Stockholders Assets Liabilities+ Equity Cash Common Stock Bal.50,000 Credit Bal.50,000 or Decrease 40,000 Land Debit for Increase 40.000 Task Team of FUndaMientalactoUntING Business Sehool. Sun Yatsen niversity 13
13 Rules of Debit and Credit Air & Sea purchased land for $40,000 cash. Common Stock Bal. 50,000 Cash Credit for Decrease, 40,000 Bal. 50,000 Land Debit for Increase, 40,000 Assets = Liabilities + Stockholders’ Equity
Expansion of the Accounting Equation Common Stock Liabilities Retained earnings Assets Dividends Stockholders Revenues Equity Expens Task Team of FUndaMientalactoUntING Business Sehool. Sun Yatsen niversity 14
14 Expansion of the Accounting Equation + Common Stock + Retained Earnings – Dividends + Revenues – Expenses Assets Stockholders’ Equity Liabilities
Recording Transactions Q Record transactions first in the journal (analyses) ◆ Ledger ◆ Posting ◆ Trial balance c Task Team of FUndaMientalactoUntING Business Sehool. Sun Yatsen niversity 15
15 Recording Transactions ⧫Record transactions first in the journal (analyses) ⧫Ledger ⧫Posting ⧫Trial balance