This video identifies the components of a journal entry.
- Now that you've seen some examples of journal entries, … perhaps you're starting to see a pattern. … I want to share with you three simple questions … you can ask for every transaction. … If you get in the habit of asking these three questions, … the whole debits and credit thing gets a lot easier. … One, what accounts are involved? … Two, did the accounts increase or decrease? … And three, by how much did each account change? … The answer to question one … tells you if the accounts involved … are assets, liabilities, or owners equity accounts. … The answer to question two … considered in conjunction with the answer to question one … tells you if those accounts are to be debited or credited. … Consider the instance where $25,000 is borrowed from a bank. … The two accounts involved are cash and notes payable. … Cash increased, … and since cash is an asset … and assets increase with debits, … then cash must be debited. … Notes payable increased. … We owe more money, … and since notes payable is a liability …
- Reviewing financial statements
- Analyzing transactions
- Categorizing transactions
- Obtaining financing and buying equipment
- How revenue and expenses fit in the accounting equation
- Recording the sale of goods or services
- Posting journal entries to accounts
- The accounting cycle: step by step
Skill Level Beginner
1. Review of the Financial Statements
2. Fours Steps in the Bookkeeping Process
3. How Transactions Affect the Accounting Equation
4. The General Ledger
5. Illustration of the First Three Steps in the Accounting Cycle
The role of computers3m 44s
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