ACC205 Week 1 Discussions and Responses.docx

The part i pay out of pocket shows up as a credit

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The part I pay out of pocket shows up as a credit (payment) meaning it is a decrease in the debit (amount owed). Comparing this to my monthly payment the impact on my balance is that the balance of the actual car not moving very fast because of the monthly interest charge because a large percentage of my payments go towards the interest (amount charged for the loan). So, the actual balance (debit) decreases but slow. My ledger should show two entries (debits) per month (car payment/interest) decreasing, based on the payments made should show only one entry (credit). There are more debits (car payment + interest) on my account than there are credits on my (payments) account, but it all balances out, as it should. “Every business transaction can be described in terms of debit/credit impacts on specific accounts so that debits will always equal credits.” Wainwright, S. K. (Ed.). (2012). Thank you for making me dig deep and think, I pray that my response the explanation is correct maybe it will help someone else, if not please don’t hesitate to correct, that way it helps all of us. Thank you again for your response. Wainwright, S. K. (Ed.). (2012). Principles of Accounting: Volume I [Electronic version]. Retrieved from Discussion 2 Response 2 Chandale Wrote An example of how debits and credits impact accounts are when you use your debit card to purchase an item at a store. You have a starting balance of $100 and purchase (credit) an item for $50. Your account has decreased to $50. If you return that item you will receive a debit to your account which will increase your balance back to $100. My Response
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Hi Chandale, Your example of the debit card was a good one. It made me think about when I get gas at the service station. I always fill-up using a debit card, not always sure how much gas my truck will take, so I guesstimate. Example: I purchase $50 worth of gas ($50 = credit) from my debit card, but my truck only takes $38 to fill it up, so there is $12 debited back to my debit card. There are some instances that they give cash back, in this case the debit card still showed a credit of $50, although I did get $12 back in cash, the ledger will still balance out. “The key ingredient is the concept of debits and credits.” Wainwright, (Ed.). (2012). Great Post! Wainwright, S. K. (Ed.). (2012). Principles of Accounting: Volume I [Electronic version]. Retrieved from
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  • Fall '10
  • RobertCarr
  • Accounting, Balance Sheet, Generally Accepted Accounting Principles, Double-entry bookkeeping system, Wainwright

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