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  • The Recording Process

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    Terrance Mendoza
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    The document discusses the basic accounting process of recording transactions using debits and credits in a double-entry system. It explains that accounts track increases and decreases to assets, liabilities, equity, revenues, and expenses, with debits recorded on the left side increasing some accounts and decreasing others, and credits on the right side having the opposite effect. For the double-entry system to balance, total debits must equal total credits for every transaction.

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    The document discusses the basic accounting process of recording transactions using debits and credits in a double-entry system. It explains that accounts track increases and decreases to assets, liabilities, equity, revenues, and expenses, with debits recorded on the left side increasing some accounts and decreasing others, and credits on the right side having the opposite effect. For the double-entry system to balance, total debits must equal total credits for every transaction.

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    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
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    4 views2 pages

    The Recording Process

    Uploaded by

    Terrance Mendoza
    The document discusses the basic accounting process of recording transactions using debits and credits in a double-entry system. It explains that accounts track increases and decreases to assets, liabilities, equity, revenues, and expenses, with debits recorded on the left side increasing some accounts and decreasing others, and credits on the right side having the opposite effect. For the double-entry system to balance, total debits must equal total credits for every transaction.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
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    of 2

    The Recording Process:

    Account

    - Is an individual accounting record of increase and decreases in a specific asset etc.

    Basic Form of Account:

    Debits

    - Indicates left side

    - Increase assets, decrease liabilities

    - Decrease owner’s capital

    - Increase owner’s drawing

    - Decrease Revenue, Increase expense

    Credit

    - Indicates right side

    - Decrease assets, increase liabilities

    - Increase owner’s capital

    - Decrease owner’s drawing


    - Increase revenue, decrease expenses

    Double – Entry System

    - Equal debits and credits made accounts for each transaction

    - Total debit always equal total credits

    - Assets = Liabilities + Equity

    Normal Balance

    - Every account has a designated normal balance

    Assets: Debit

    Liabilities: Credit

    Capital: Credit

    Drawings: Debit

    Revenue: Credit

    Expenses: Debit

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