Difference between revisions of "Financial account"

From CNM Wiki
Jump to: navigation, search
(Rules of debit and credit)
Line 1: Line 1:
A [[financial account]] (or, simply, [[account]]; hereinafter, the ''Account'') is an accounting device used in [[bookkeeping]] to record increases and decreases of business transactions relating to [[assets]], [[liabilities]], [[capital]], [[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 increases (debits) and decreases (credits) or, vice versa, [[accounts payable]] increases (credits) and decreases (debits).
+
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==
Line 17: Line 17:
 
![[Expenses]]
 
![[Expenses]]
 
|-
 
|-
![[Owner's drawings|Owner's Withdrawals]]
+
![[Owner's Withdrawals]]
 
|-
 
|-
 
|rowspan="3"|[[Claim-origin account]]s
 
|rowspan="3"|[[Claim-origin account]]s
Line 32: Line 32:
 
|}
 
|}
 
::''Main wikipage: [[Rules of debit and credit]]''
 
::''Main wikipage: [[Rules of debit and credit]]''
:*[[Resource-origin account]]s, which are [[assets]], [[withdrawals]], and [[expenses]], are debited when they increase and credited when they decrease.
+
:*[[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

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.