2024年5月17日发(作者：联想电脑黑屏开不了机怎么办)

Double-entry Accounting System (Lecture 4)

In this free online accounting lesson we define a T-account, debit, credit and account balance.

We then talk about double entry bookkeeping system and related double entry rules. After that

we discuss general journals, ledgers and the posting process. Finally, we understand closing

entries and their purpose. Accounting examples are provided for most learning objectives.

This part will be devoted to new techniques used by most accountants in the world. The technique is

called a double-entry recording process. To understand it better we are introducing a T account.

T account is an individual accounting record that shows information about increases and decreases in

one balance sheet or income statement account. It is so called because it has a form of letter T.

On the top of the horizontal bar there is the account title. Account decreases and increases are placed on

the either side of the vertical bar:

Account Title

Decreases Increases

& &

Increases Decreases

The left side of the T account is called Debit, and the right side is called Credit.

Debit is the left side of a T account.

Credit is the right side of a T account.

Often these two terms are abbreviated as Dr and Cr. It is common to say that an account has been

debited when the amount is placed on the left side of an account, and credited if the amount is placed on

the right side.

Account balance is the difference between the debit and the credit side of a T account.

Now we can define the double-entry system:

Double-entry recording system provides for the equality of total debits and total credits.

4.1 Double-entry accounting system and its rules

The double-entry rule can be helpful when we need to find a mistake in financial records. If total debits do

not equal total credits, there must be a mistake. However, this system cannot ensure complete accuracy.

For example, even if we do make sure debit balances equal credit ones, it is quite possible to choose a

wrong account debit (credit) while making an entry.

Two important rules about double-entry recording system:

Assets = Claims (Liabilities and Owner's Equity)

Total Debits = Total Credits

4.2 Effects of debits and credits on accounts

Let us see how debits and credits affect accounts. As it was said, debit is the left side and credit is the

right side of an account. Increases and decreases are recorded differently for asset and claim accounts.

Here is what we mean:

1. Debit entries increase asset accounts, and decrease liability and equity accounts.

2. Credit entries increase liability and equity accounts, and decrease asset accounts.

Illustration 4-1: Effects of debits and credits in T accounts

An easy way to remember these rules is to learn that increases are posted on the outsides (see plus

signs above) and decreases are posted on the insides (see minus signs above). That rule holds true for

asset as well as liability and equity accounts.

4.3 Illustration of applying double-entry accounting system

We will go to an illustration. A company, called Huske's Consultants, started its operations on January 1,

2006 when the owner, Mrs. Huske, contributed cash into the business. All accounts had zero beginning

balances. We will see how each transaction affects T accounts and the accounting equation. Transaction

impacts on the financial statements will be shown in a horizontal statements model. All the events are

numbered and their numbers are used as recording references. Recall that there are four types of

accounting events:









Asset source transactions

Asset use transactions

Asset exchange transactions

Claims exchange transactions

Transaction type will be indicated for each accounting event. All transactions took place during 20X6.

Due to the space limitations, we will not show all the accounts while explaining a transaction. Only those

accounts that are affected by a particular transaction will be shown in the accounting equation.