Unit 1 DB - Unit 1 Discussion Board Tammi Pierce American...

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Unit 1 Discussion Board Tammi Pierce American InterContinental University Your father runs a small auto body shop. He has decided to computerize his records and has asked you to explain the basics of accounting to him so that he can enter the data into his accounting software. Explain to him the rules of debits and credits for the balance sheet and income statement . Debits and credits are the tools used in recording transactions. The rules of debits and credits are an integral part of this double system. For each transaction, the debits and credits are always equal. These rules work to keep the accounting equation (Assets=Liabilities + Stockholders’ Equity) in balance. Assets are economic resources owned by the business, also referred to as “things of value”. Examples include: cash, accounts receivable, merchandise inventory, supplies, prepaid expenses, land, buildings, equipment, and vehicles. Assets are increased with the debit and decreased with a credit. The normal
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This note was uploaded on 01/01/2012 for the course ACCT 205 taught by Professor Wendyw.achilles during the Spring '10 term at American InterContinental University.

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Unit 1 DB - Unit 1 Discussion Board Tammi Pierce American...

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