Double-Entry Accounting When a business receives something of value, it must give up something of value in return.

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Presentation transcript:

Double-Entry Accounting When a business receives something of value, it must give up something of value in return

Double-Entry Accounting Debt- Receive Credit-Giving +Plus_ minus

In Double-Entry Accounting, everything must be entered twice CATEGORY____ Debit(taking money) Credit(giving money) Your right hand gives it to your left hand to spend it

Ex. #1 Dixie would like $15,000 to buy a dishwasher. CASH_______ Debit(taking money) Credit(giving money) $15,000 Equipment____ Debit(taking money) Credit(giving money) $15,000 Why? The restaurant has to “give” the cash to the equipment, who will “take” it to pay vendor.

Ex. #2 Your restaurant collected $4500 in revenue. CASH_______ Debit(taking money) Credit(giving money) $4500 Revenue____ Debit(taking money) Credit(giving money) $4500 Why? The restaurant is taking money from the customers, in the form of revenue.

Ex. #3 Your restaurant paid $3700 in wages. CASH_______ Debit(taking money) Credit(giving money) $3700 Wages______ Debit(taking money) Credit(giving money) $3700 Why? The restaurant is “giving” money to the employees in the form of wages, who’s “taking” it

It’s important to see, who/where your restaurant cash it going. You have to account for your money, double account ___CASH_ Debit(taking money) Credit(giving money) $3700 ________Wages______ Debit(taking money) Credit(giving money) $3700 ___ CASH_ Debit(taking money) Credit(giving money) $15,000 _____ Equipment ____ Debit(taking money) Credit(giving money) $15,000

Ex. #4 You buy a $15,000 dishwasher, pay $3700 is wages, earn $4200 in revenue, and purchase food using $9,000 cash ___CASH_ Debit(taking money) Credit(giving money) $4200 $15,000 $3,700 $9,000 ________Wages______ Debit(taking money) Credit(giving money) $3700 ______Food Inventory Debit(taking money) Credit(giving money) $9000 _____ Equipment______ Debit(taking money) Credit(giving money) $15,000 _____ Revenue__________ Debit(taking money) Credit(giving money) $4200