1. TRANSACTIONS THAT AFFECT REVENUE, EXPENSES AND WITHDRAWALS Chapter 5

2. Relationship of Revenue, Expenses and Withdrawals to Owner’s Equity  Temporary Accounts – Accounts that are used to collect information for a single accounting period.  Examples: Revenue, Expenses, Withdrawals  Permanent Accounts – Accounts that are continuous from one accounting period to the next.

3. Temporary Accounts that Affect Capital  Increases to Capital  Ex:  Decreases to Capital  Ex:

4. Rules of Debit and Credit for Expenses and Withdrawals  Expense Accounts  Increased on the debit side (left side)  Decreased on the credit side (right side)  The Normal Balance for Expenses is the Debit side Debit + Increase Side Normal Balance Credit - Decrease Side Expenses

5. Rules for Revenue and Fees  Revenue and Fees Accounts  Increased on the Credit (Right) side  Decreased on the Debit (Left) side  Normal Balance on the Credit side Debit - Decrease Side Credit + Increase Side Normal Balance Revenue / Fees