Accounting Ch 4

Accounting Ch 4 - Chapter 4: The Bookkeeping Process and...

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Chapter 4: The Bookkeeping Process and Transaction Analysis Assets increase with a debit entry from a seller’s perspective Transactions are recorded in a journal. Then they are recorded in-posted to a ledger with an account for each category. The left side of a T-account is called the debit side, and the right side is called the credit side. Increases in assets are recorded as debit entries to these accounts; decreases in assets are recorded as credit entries. For liabilities and owners’ equity, the opposite is true. Revenue accounts normally have a credit balance; Expense accounts usually have a debit balance, and will increase with debit entries. After the end of the accounting period, bookkeepers normally have to record and adjustment to certain account balances to reflect accrual accounting in the financial statements. Accruals are transactions for which cash has not yet been received or paid, but the effect of which must be recorded in the accounts to accomplish a matching of revenues and
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