spend a little time discussing why we need to know
this simple equation and begin to understand how it works.
This is The Basic Accounting Equation
Assets = Liabilities + Owner's Equity
What a company owns must always equal (=)
what it owes to its creditors
plus (+) what it owes to the owner or owners
DEBIT - CREDIT Rule
Each of the accounts in a Ledger will have a Debit Column and a Credit Column. Debits and Credits increase or decrease amounts on a ledger page account without having to use a plus (+) or minus (-) sign.
No matter what - always
|T's within T's
Single Proprietor and Partnerships
The next step is
to fill in these Ledger pages
using the amounts in the General Journal
and show how Posting to Ledger pages is done.
Next we will make a Trial Balance to be sure
that all the different accounts are in balance.
learned here will help you understand what's happening
behind the scene when using various accounting software programs.
of Accounts is simply a list of accounts.
For now, accounts in the Chart of Accounts can ultimately
be plugged into the Basic Accounting Equation.
= Liabilities + Owner's Equity