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For Every Debit There Is A Credit OR Debits = Credits.

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Presentation on theme: "For Every Debit There Is A Credit OR Debits = Credits."— Presentation transcript:

1 For Every Debit There Is A Credit OR Debits = Credits

2 Double Entry Accounting Recognizes the different sides of a business transaction. Separates the transaction into debits and credits

3 Can Be Debited and Credited Have an Increase Side (Column) and a Decrease Side (Column) Have a Debit Side (Column) and a Credit Side (Column) Debit Side is the Left Side (Left Column) Credit Side is the Right Side (Right Column) Have a Type and are classified as an Asset, Liability, Equity, Revenue, Expense, or Draw Are Either a Balance Sheet or Income Statement Account Have a Normal Balance Amount that is normally a Debit Balance or a Credit Balance All Accounts:

4 Determining What To Debit and Credit How do I determine what to debit and credit when recording transactions ? or as William Shakespeare might have said "To Debit or Credit that is the question.“

5 Debit Balances Asset - Normally a Debit Balance Owner’s Drawing - Normally a Debit Balance Expense - Normally a Debit Balance

6 Credit Balances Liabilities - Normally a Credit Balance Owner's Equity ( Capital ) - Normally a Credit Balance Revenue - Normally a Credit Balance

7 Normal Balance The Normal Balance is the debit or credit balance that an account is expected to have.. The normal balance is also the side of the account that increases the balance of the account.

8 Enter an amount in the Normal Balance Side of an Account to Increase the Balance of an Account and in the Opposite Side of an Account to Decrease the Balance of an Account. All You Need To Know About Debits and Credits Summarized In One Sentence:

9 T-accounts T-Accounts are used as a tool to illustrate business transactions, debits and credits, double entry bookkeeping, and the purpose of accounts. It is called this because it has the form of the letter T.

10 Normal Balance Debit Increase Debit Decrease Credit Left Side or Debit Side of Account Right Side or Credit Side of Account

11 Normal Balance Credit Decrease Debit Increase Credit Left Side or Debit Side of Account Right Side or Credit Side of Account

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