Difference between revisions of "Financial account"
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![[Normal balance]] (or increase)!!Decrease | ![[Normal balance]] (or increase)!!Decrease | ||
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| − | |rowspan="3"|[[ | + | |rowspan="3"|[[Asset-origin account]]s |
![[Assets]] * | ![[Assets]] * | ||
|rowspan="3"|Debit||rowspan="3"|Credit | |rowspan="3"|Debit||rowspan="3"|Credit | ||
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![[Owner's Withdrawals]] | ![[Owner's Withdrawals]] | ||
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| − | |rowspan="3"|[[ | + | |rowspan="3"|[[Equity-origin account]]s |
![[Liabilities]] * | ![[Liabilities]] * | ||
|rowspan="3"|Credit||rowspan="3"|Debit | |rowspan="3"|Credit||rowspan="3"|Debit | ||
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::''Main wikipage: [[Rules of debit and credit]]'' | ::''Main wikipage: [[Rules of debit and credit]]'' | ||
| − | :*[[ | + | :*[[Asset-origin account]]s, which include [[Assets]], [[Owner's Withdrawals]], and [[Expenses]], are debited when they increase and credited when they decrease. |
| − | :*[[ | + | :*[[Equity-origin account]]s, which are [[Liabilities]], [[Owner's Capital]], and [[Fiscal Revenue]], are debited when decrease and credited when they increase. |
===Adjusting accounts=== | ===Adjusting accounts=== | ||
Revision as of 02:18, 15 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, Fiscal 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 (is debited) and decreases (is credited) or, vice versa, Accounts Payable increases (is credited) and decreases (is debited).
Journalizing
- Main wikipage: Journalizing
Rules of debit and credit
Rules of debit and credit Category Type Normal balance (or increase) Decrease Asset-origin accounts Assets * Debit Credit Expenses * Owner's Withdrawals Equity-origin accounts Liabilities * Credit Debit Fiscal Revenue * Owner's Capital * Adjusting accounts behave oppositely to the Accounts that they adjust
- Main wikipage: Rules of debit and credit
- Asset-origin accounts, which include Assets, Owner's Withdrawals, and Expenses, are debited when they increase and credited when they decrease.
- Equity-origin accounts, which are Liabilities, Owner's Capital, and Fiscal 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.
