Difference between revisions of "Financial account"
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| − | A [[financial account]] (or, simply, [[account]]; hereinafter, the ''Account'') is an accounting device used in [[bookkeeping]] to record increases and decreases of business transactions | + | A [[financial account]] (or, simply, [[account]]; hereinafter, the ''Account'') is an accounting device used in [[bookkeeping]] to record increases and decreases of business transactions related to [[Assets]], [[Liabilities]], [[Owner's Capital]], [[Owner's Withdrawals]], [[Revenue]], and/or [[Expenses]]. In other words, the ''Account'' is the [[concept]] that is used to record financial entries of a similar nature such as [[Cash at Bank]] increases (debits) and decreases (credits) or, vice versa, [[Accounts Payable]] increases (credits) and decreases (debits). |
==Journalizing== | ==Journalizing== | ||
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![[Expenses]] | ![[Expenses]] | ||
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| − | ![[ | + | ![[Owner's Withdrawals]] |
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|rowspan="3"|[[Claim-origin account]]s | |rowspan="3"|[[Claim-origin account]]s | ||
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::''Main wikipage: [[Rules of debit and credit]]'' | ::''Main wikipage: [[Rules of debit and credit]]'' | ||
| − | :*[[Resource-origin account]]s, which | + | :*[[Resource-origin account]]s, which include [[Assets]], [[Owner's Withdrawals]], and [[Expenses]], are debited when they increase and credited when they decrease. |
:*[[Claim-origin account]]s, which are [[liabilities]], [[capital]], and [[revenue]], are debited when decrease and credited when they increase. | :*[[Claim-origin account]]s, which are [[liabilities]], [[capital]], and [[revenue]], are debited when decrease and credited when they increase. | ||
Revision as of 19:16, 11 December 2018
A financial account (or, simply, account; hereinafter, the Account) is an accounting device used in bookkeeping to record increases and decreases of business transactions related to Assets, Liabilities, Owner's Capital, Owner's Withdrawals, Revenue, and/or Expenses. In other words, the Account is the concept that is used to record financial entries of a similar nature such as Cash at Bank increases (debits) and decreases (credits) or, vice versa, Accounts Payable increases (credits) and decreases (debits).
Journalizing
- Main wikipage: Journalizing
Rules of debit and credit
Rules of debit and credit Category Type Normal balance (or increase) Decrease Resource-origin accounts Assets Debit Credit Expenses Owner's Withdrawals Claim-origin accounts Liabilities Credit Debit Revenue Owner's Capital Adjusting accounts Any Behave oppositely to the Accounts that they adjust
- Main wikipage: Rules of debit and credit
- Resource-origin accounts, which include Assets, Owner's Withdrawals, and Expenses, are debited when they increase and credited when they decrease.
- Claim-origin accounts, which are liabilities, capital, and revenue, are debited when decrease and credited when they increase.
Adjusting accounts
- Main wikipage: Adjusting account
Chart of accounts
- Main wikipage: Chart of accounts
Every organization can establish its own list of account titles, which is called the chart of accounts.
