Debits and Credits Summary Liabilities Normal Debit /Dr. Credit/Cr. Normal Balance Balance Debit Credit Normal Balance Assets Equity Debit/Dr. Credit/Cr. Debit/Dr. Credit/Cr. ↓ Normal Balance Normal Balance Expense Revenue Debit/Dr. Credit/Cr. Debit /Dr. Credit/Cr. ↓ Normal Balance Normal Balance Chapter 3-11 LO 2 Explain double-entry rules
Chapter 3-11 Chapter 3-23 Assets Debit / Dr. Credit / Cr. Normal Balance Chapter 3-27 Debit / Dr. Credit / Cr. Normal Balance Expense Chapter 3-24 Liabilities Debit / Dr. Credit / Cr. Normal Balance Chapter 3-25 Debit / Dr. Credit / Cr. Normal Balance Equity Chapter 3-26 Debit / Dr. Credit / Cr. Normal Balance Revenue Normal Balance Credit Normal Balance Debit
Debits and Credits Summary Balance Sheet Income Statement Asset Liability Equity Revenue-Expense Debit Credit 合 合 ↓ Chapter 3-12 LO 2 Explain double-entry rules
Chapter 3-12 Asset = Liability + Equity Revenue - Expense = Debit Credit
Basic Accounting Equation Relationship among the assets,liabilities and stockholders'equity of a business: Illustration 3-3 Basic Assets Liabilities Stockholders'Equity Equation Expanded Common Retained Basic Equation Assets Liabilities Stock + Earnings Dividends Revenues Expenses Dr. Cr Dr Cr. Dr. Cr. Dr. Cr. Dr. Cr. Dr. Cr. Dr. Debit/Credit Rules The equation must be in balance after every transaction.For every Debit there must be a Credit. Chapter 3-13 LO 2 Explain double-entry rules
Chapter 3-13 Illustration 3-3
Double-Entry System Exercise 1. Invested $32,000 cash and equipment valued at $14,000 in the business. Stockholders' Assets = Liabilities + Equity +32000 +46000 +14,000 Chapter 3-14 LO 2 Explain double-entry rules
Chapter 3-14 = + + 32,000 + 14,000 + 46,000
Double-Entry System Exercise 2.Paid office rent of $600 for the month. Stockholders' Assets = Liabilities + Equity -600 -600 (expense) Chapter 3-15 LO 2 Explain double-entry rules
Chapter 3-15 = + - 600 - 600 (expense)