Essay on Halo~
THE RECORDING PROCESS
ACCT100 Fall 2013 Teresa Chu
Record increases and decreases in a specific asset, liability or equity item Debit = “Left” Credit = “Right”
Debit / Dr.
Credit / Cr.
Debits and Credits Double-entry system
Dual effect of transaction
Each transaction MUST affect 2 or more accounts to keep the basic accounting equation balance DEBIT = CREDIT for each transaction
Summary of Debit/Credit Rules
Debits > Credits → Debit balance Credits > Debits → Credit balance Normal balance: the side to record increases
Steps in the Recording Process
1) Analysis of transaction → Analyze business …show more content…
(Analysis: + Cash; + Share Capital - Ordinary)
Date Account Title Debit Credit 200,000
(Issued shares for cash)
Share Capital - Ordinary
Oct. 2 Hires an administrative assistant.
(Analysis: A business-related transaction)
Date Oct. 2
Account Title No entry
Purchases office furniture for ¥ 19,000 on account.
(Analysis: + Office furniture; + Accounts payable)
(Purchased furniture on account)
Sells a house and lot for N. Fennig; bills N. Fennig ¥32,000 for realty services provided.
(Analysis: + Accounts receivable; + Service revenue)
(Provided services on account)
Pays ¥8,500 on balance related to transaction of Oct. 3. (Analysis: - Cash; - Accounts payable)
Accounts payable (Paid on account) Cash
Pays the administrative assistant ¥25,000 salary