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Reviewing Debits & Credits
Chapter Reviewing Debits & Credits
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Increases, Decreases, and Balances in Accounts
Assets Are on the left side of the accounting equation Thus, increases are recorded on the left (debit) side of the account Liabilities and the owner’s capital account Are on the right side of the accounting equation Thus, increases are recorded on the right (credit) side of the account Normal balance: The side of the account that is increased is called the normal balance of the account. Assets have normal debit balances Liabilities and the owner’s capital account have normal credit balances
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Increases, Decreases, and Balances in Accounts
Lesson 2-1 Increases, Decreases, and Balances in Accounts
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Received Cash from Owner as an Investment
Lesson 2-2 Received Cash from Owner as an Investment January 2. Received cash from owner as an investment, $2, Cash is debited. 1 Michael Delgado, Capital is credited. 2
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Paid Cash for Supplies January 2. Paid cash for supplies, $165.00. 1 2
Lesson 2-2 Paid Cash for Supplies January 2. Paid cash for supplies, $ Supplies is debited. 1 Cash is credited. 2
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Paid Cash for Insurance
Lesson 2-2 Paid Cash for Insurance January 3. Paid cash for insurance, $ Prepaid Insurance is debited. 1 Cash is credited. 2
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Bought Supplies on Account
Lesson 2-2 Bought Supplies on Account January 5. Bought supplies on account from Canyon Office Supplies, $ Supplies is debited. 1 Accounts Payable— Canyon Office Supplies is credited. 2
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Lesson 2-2 Paid Cash on Account January 9. Paid cash on account to Canyon Office Supplies, $ Cash is credited. 1 Accounts Payable— Canyon Office Supplies is debited. 2
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Received Cash from Sales
Lesson 2-3 Received Cash from Sales January 10. Received cash from sales, $1, Cash is debited. 1 Sales is credited. 2
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Sold Services on Account
Lesson 2-3 Sold Services on Account LO5 January 12. Sold services on account to Main Street Services, $ Accounts Receivable— Main Street Services is debited. 1 Sales is credited. 2
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Paid Cash for an Expense
Lesson 2-3 Paid Cash for an Expense January 12. Paid cash for bill for cell phone and Internet service, $80.00. Cash is credited. 2 Communications Expense is debited. 1
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Received Cash on Account
Lesson 2-3 Received Cash on Account LO5 January 16. Received cash on account from Main Street Services, $ Assets Accounts Receivable— Main Street Services is credited. 2 Cash is debited. 1
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Paid Cash to Owner for Personal Use
Lesson 2-3 Paid Cash to Owner for Personal Use January 16. Michael Delgado withdrew equity in the form of cash, $ Cash is credited. 2 Michael Delgado, Drawing is debited. 1
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successful in Accounting:
Remember the key to being successful in Accounting: Avoid pure memorization. Instead, work at understanding the concepts—the “WHY”—and you will do great on the Assessments.
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