Economics /Management 4 Financial Accounting T-Accounts Using Debits & Credits Reader pages.

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Economics /Management 4 Financial Accounting T-Accounts Using Debits & Credits Reader pages

ASSETS Debit for Increase Credit for Decrease EQUITIES Debit for Decrease Credit for Increase LIABILITIES Debit for Decrease Credit for Increase Debit on the “Left” & Credit on the “Right” A = L + Eq

ASSETS Debit for Increase Credit for Decrease EQUITY Debit for Decrease Credit for Increase LIABILITIES Debit for Decrease Credit for Increase A = L + Eq Paid-in Capital Retained Earnings Cash Payables

A T-account is a tool used to represent an account and to audit Debits & Credits Account Name The Left side indicates a DEBIT THE Right side indicates a CREDIT Debits LEFTCredits RIGHT

Asset Beginning 0 Increase of 1,000 No need for “ ( )” when recording a decrease to an Asset because the RHS entry tells us it’s a reduction to a LHS account Debits LEFTCredits RIGHT Decrease of 500 Ending 500

Liability Beginning 0 Increase of 1,000 No need for “ ( )” when recording a decrease to an Liability because the LHS entry tells us it’s a reduction to a RHS account Debits LEFTCredits RIGHT Decrease of 500 Ending 500