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    Joining The Pieces: Chapter 2 - Total Debits Total Credits

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    Ramki Jagadishan
    Total debits must equal total credits in accounting. Assets are recorded on the left side using debits, while liabilities and owner's equity are recorded on the right side using credits. Increases to asset accounts use debits, while increases to liability and owner's equity accounts use credits. Expenses decrease owner's equity and use debits, while revenues increase owner's equity and use the same debits and credits as the owner's equity account.

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    Joining The Pieces: Chapter 2 - Total Debits Total Credits

    Uploaded by

    Ramki Jagadishan
    9 views1 page
    Total debits must equal total credits in accounting. Assets are recorded on the left side using debits, while liabilities and owner's equity are recorded on the right side using credits. Increases to asset accounts use debits, while increases to liability and owner's equity accounts use credits. Expenses decrease owner's equity and use debits, while revenues increase owner's equity and use the same debits and credits as the owner's equity account.

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    Accounting

    Original Title

    Credit Debit

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    Total debits must equal total credits in accounting. Assets are recorded on the left side using debits, while liabilities and owner's equity are recorded on the right side using credits. Increases to asset accounts use debits, while increases to liability and owner's equity accounts use credits. Expenses decrease owner's equity and use debits, while revenues increase owner's equity and use the same debits and credits as the owner's equity account.

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    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
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    Download as pdf or txt
    9 views1 page

    Joining The Pieces: Chapter 2 - Total Debits Total Credits

    Uploaded by

    Ramki Jagadishan
    Total debits must equal total credits in accounting. Assets are recorded on the left side using debits, while liabilities and owner's equity are recorded on the right side using credits. Increases to asset accounts use debits, while increases to liability and owner's equity accounts use credits. Expenses decrease owner's equity and use debits, while revenues increase owner's equity and use the same debits and credits as the owner's equity account.

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    © All Rights Reserved
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    Chapter 2 - Total Debits = Total Credits

    JOINING THE PIECES


    TOTAL DEBITS = TOTAL CREDITS

    Left Right
    Assets are on A = L + OE Liabilities and
    the left side of owner’s equity
    the accounting Account are on the right
    equation; debit side of the
    is on the left Left Right
    accounting equa-
    side of the (Debit) (Credit) tion; credit is on
    account. the right side of
    the account.

    Asset Liability
    accounts are accounts and
    increased by the owner’s
    debits. capital
    account are
    increased by
    credits.

    Asset Accounts Liability Accounts


    Debit Credit Debit Credit
    + – – +

    Capital Account
    Debit Credit
    – +

    Expenses and owner with-


    drawals decrease owner’s
    equity. As a result, the increase Revenue increases owner’s
    and decrease sides of expense equity. As a result, the increase
    accounts and the owner’s and decrease sides of revenue
    drawing account are opposite accounts are the same as the
    the owner’s capital account. owner’s capital account.

    Expense Accounts Revenue Accounts


    Debit Credit Debit Credit
    + – – +

    Drawing Account
    Debit Credit
    + –

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