ACCOUNTS

• WHERE SIMILAR TRANSACTIONS ARE GROUPED

ASSETS

• CASH• MARKETABLE SECURITIES• ACCOUNTS RECEIVABLE• INVENTORY• PREPAID EXPENSES (SUPPLIES)• EQUIPMENT • BUILDING• LAND

EXPENSES

• RENT EXPENSE• SALARY EXPENSE• COST OF GOODS SOLD EXPENSE• ETC. EXPENSE

DEBITS AND CREDITS

• FOR EVERY DEBIT THERE IS A CREDIT• Debits on Left• Credits on Right

ASSETS AND EXPENSES

• TO INCREASE AN ASSET OR EXPENSE IT IS DEBITED

• TO DECREASE AN ASSET OR EXPENSE IT IS CREDITED

Assets & Expenses

(+) Increase Account (-) Decrease Account

LET’S MAKE SOME JOURNAL ENTRIES

• BUY SOME INVENTORY FOR $500. THE INVENTORY IS INCREASED (DEBITED), THE CASH IS DECREASED (CREDITED)

• DEBIT CREDIT• INVENTORY $500• CASH $500

RENT EXPENSE IS PAID

DEBIT CREDITRENT EXPENSE $300CASH $300

SUPPLIES ARE PURCHASED

• DEBIT CREDIT• SUPPLIES $100• CASH $100

MAKE THE JOURNAL ENTRY

• RENT EXPENSE OF $700 IS PAID IN CASH

• DEBIT CREDIT• RENT EXPENSE $700• CASH $700

MAKE THE JOURNAL ENTRY

• INVENTORY IS PURCHASED FOR $900

• DEBIT CREDIT• INVENTORY $900• CASH $900

MEMORIZATION

• MEMORIZE THE DIFFERENT TYPES OF ASSETS

• MEMORIZE THE COMMON EXPENSES