Double Entry Accounting Tutorial
A double entry accounting system uses journal entries to record a transaction. Each transaction has at least one debit and one credit. The main concept to remember is debts must always equal credits. So if you have $500 worth of debits, then you need $500 worth of credits for your journal entry. Debiting and crediting either increases or decreases an account. The main types of accounts in accounting are assets, liabilities, revenue, expense and equity.
Other People Are Reading
Instructions
-
-
1
Increase an asset account by debiting the account. An asset account is an account that has economic use for the company. Examples include cash, equipment and property. Decrease the account by crediting it.
-
2
Increase a liability account by crediting the account. A liability account is an account where the company owes some kind of debt. Examples include loans and notes payable. Decrease the account by debiting it.
-
-
3
Increase an equity account by crediting the account. An equity account is one that shows some type of ownership in the company. Examples include common stock, preferred stock and additional paid in capital. Decrease the account by debiting it.
-
4
Increase a revenue account by crediting the account. A revenue account is an account that brings the company money. An example includes sales. Decrease the account by debiting it.
-
5
Increase an expense account by debiting the account. An expense account is an account where the company pays money. An example includes purchases. Decrease the account by crediting it.
-
1
