From the course: Advanced Bookkeeping Techniques
Join today to access over 22,600 courses taught by industry experts or purchase this course individually.
Journal entries: Receiving financing from owners and lenders
From the course: Advanced Bookkeeping Techniques
Journal entries: Receiving financing from owners and lenders
- Using the language of debits and credits, the effect of transactions are recorded in what are called journal entries. Journal entries succinctly summarize the accounts involved in a transaction, whether those accounts increased or decreased, and the associated amounts. Each journal entry has its debit amounts equal to its credit amounts. I won't prove this mathematically but this simple rule ensures that the all-important accounting equation is always maintained. By the way, tradition dictates that journal entries have a specific format. The account being debited is listed first and the account being credited is listed second. Also the credit entry is indented. In translating a transaction into the debit and credit language, here is a simple approach that I have found to work well. First, search the transactions for anything affecting cash and then record the cash. Next, look for any impacts on other assets.…
Practice while you learn with exercise files
Download the files the instructor uses to teach the course. Follow along and learn by watching, listening and practicing.
Download courses and learn on the go
Watch courses on your mobile device without an internet connection. Download courses using your iOS or Android LinkedIn Learning app.