Accounting Made Simple by Piper Mike

Author:Piper, Mike [Piper, Mike]
Language: eng
Format: epub
ISBN: 9780981454221
Publisher: Simple Subjects, LLC
Published: 2010-08-31T14:00:00+00:00

As you can see, when recording a journal entry, the account that is debited is listed first, and the account that is credited is listed second, with an indentation to the right. Also, debit is conventionally abbreviated as “DR” and credit is abbreviated as “CR.” (Often, these abbreviations are omitted, and credits are signified entirely by the fact that they are indented to the right.)

An easy way to keep everything straight is to think of “debit” as meaning “left,” and “credit” as meaning “right.” In other words, debits increase accounts on the left side of the accounting equation, and credits increase accounts on the right side. Also, this helps you to remember that the debit half of a journal entry is on the left, while the credit half is indented to the right.

Let’s take a look at a few more example transactions and see how they would be recorded as journal entries.

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