2
mypical entries
Balancing a m-
m-Êccount
Cash
First, foot
the debit 3,750 850
side. 4,300 1,400
2,900 700
10,950 2,900
Cash
3,750 850
4,300
Ne t, foot the 1,400
2,900
credit side. 700
10,950 2,900
5,850
Subtract total credits
Cash from total debits to
obtain the account
3,750 850
balance.
4,300 1,400
2,900 700
a 10,950 2,900
5,850
mransactions and Balance
Sheet Êccounts
(Ê) On November 1, Chris Clark
deposits $25,000 in a bank account in
the name of NetSolutions.
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Post.
Date Description Ref. Debit Credit
2005
1 ½ov. 1 Cas 25 000 00
2 C ris Clark, Capital 25 000 00
3 Invested cas in ½etSolutions.
4
(Ê) On November 1, Chris Clark
deposits $25,000 in a bank account in
the name of NetSolutions.
4
5 5 Land 20 000 00
6 Cas 20 000 00
7 Purc ased land for building
8 site.
9
10
(B) On November 5,
NetSolutions bought land
for $20,000, paying cash.
10
11 10 Supplies 1 350 00
12 Accounts Payable 1 350 00
13 Purc ased supplies on account.
14
15
16
(C) On November 10, NetSolutions
purchased supplies on account
for $1,350.
30
31 30 Accounts Payable 950 00
32 Cas 950 00
33 Paid creditors on account.
34
35
36
(F) On November 30, NetSolutions
paid creditors on account, $950.
OWNÔR¶S ÔUImY
Owner¶s Ôquity Êccounts
Debit for Credit for
decreases increases
(-) (+)
(D) On November 18, NetSolutions
received fees of $7,500 from
customers for services provided .
14
15 18 Cas 500 00
16 Fees Earned 500 00
17 Received fees from customers.
18
19
20
(D) On November 18, NetSolutions
received fees of $7,500 from
customers for services provided .
^iscellaneous Ô pense
½ov. 30 25
In every entry the sum of
the debits always equal
the sum of the credits.
(G) On November 30, a count revealed
that $800 of the supplies inventory
had been used.
25
26 30 Supplies Expense 800 00
27 Supplies 800 00
28 Supplies used during
29 ½ovember.
30
31
(G) On November 30, a count revealed
that $800 of the supplies inventory
had been used.
$ %!
$
Receive Give
Luca Pacioli DEBIT CREDIT
Developer of
Double-Entry Receive Give
Accounting DEBIT CREDIT
Rules of debit / Credit Income
Statement Accounts
Ô pense Êccounts Revenue Êccounts
Debit for Credit for Debit for Credit for
increases decreases decreases increases
(+) (-) (-) (+)
Income Statement Accounts
debits Credits
Revenue accounts«« Decrease (-) Increase (+)
Ô pense accounts«« Increase (+) Decrease (-)
Wit dra als
by t e
ë ner
(H) On November 30, Chris Clark
withdrew $2,000 in cash from
NetSolutions for personal use.
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Post.
Date Description Ref. Debit Credit
2005
1 ½ov. 30 C ris Clark, dra ing 2 000 00
2 Cas 2 000 00
3 C ris Clark it dre cas for
4 personal use.
(H) On November 30, Chris Clark
withdrew $2,000 in cash from
NetSolutions for personal use.
º
Êsset Debit Credit
Liability Credit Debit
Owner¶s Ôquity:
Capital Credit Debit
Drawing Debit Credit
Revenue Credit Debit
Ô pense Debit Credit
Flow of Business mransactions
mransaction mransaction Document
1 authorized 2 takes place 3 prepared
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Post.
Date Description Ref. Debit Credit
2005
1 dec. 31 Prepaid Insurance 2 400 00
2 Cas 2 400 00
3 Paid premium on t oyear
4 policy.
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Post.
Date Description Ref. Debit Credit
2005
1 dec. 1 Prepaid Insurance 2 400 00
2 Cas 2 400 00
3 Paid premium on t oyear
4 policy.
ACCOUNT
ACCOUNT NO.
Balance
Post.
Date Item Ref. Debit Credit Debit Credit
2005
dec. 1 2 400 00 2 400 00
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Post.
Date Description Ref. Debit Credit
2005
1 dec. 1 Prepaid Insurance 15 2 400 00
2 Cas 2 400 00
3 Paid premium on t oyear
4 policy.
ACCOUNT
ACCOUNT NO.
Balance
Post.
Date Item Ref. Debit Credit Debit Credit
2005
dec. 1 2 2 400 00 2 400 00
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Post.
Date Description Ref. Debit Credit
2005
1 dec. 1 Prepaid Insurance 15 2 400 00
2 Cas 2 400 00
3 Paid premium on t oyear
4 policy.
14 1 Cas 14 360 00
15 Unearned Rent 23 360 00
16 Received advanced payment
17 For t ree mont s¶ rent of land.
Dec. 4 NetSolutions purchased office
equipment on account from Ô ecutive
Supply Co. for $1,800.
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Post.
Date Description Ref. Debit Credit
2005
1 dec. 13 Wages Expense 51 950 00
2 Cas 11 950 00
3 Paid t o eek¶s ages.
4
Dec. 16 NetSolutions received $3,100 from
fees earned for the first half of
December.
5 16 Cas 11 3 100 00
6 Fees Earned 41 3 100 00
7 Received fees from customers.
8
Dec. 16 Fees earned on account totaled
$1,750 for the first half of
December.
18 21 Cas 11 650 00
19 Accounts Receivable 12 650 00
20 Received cas from customer
21 on account.
Dec. 23 NetSolutions paid $1,450 for
supplies.
22 23 Supplies 14 1 450 00
23 Cas 11 1 450 00
24 Purc ased supplies.
25
Dec. 27 NetSolutions paid the receptionist
and part-
part-time assistant $1,200 for
two weeks¶ wages.
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Post.
Date Description Ref. Debit Credit
2005
1 dec. 31 Utilities Expense 54 225 00
2 Cas 11 225 00
3 Paid utility bill.
4
Dec. 31 NetSolutions received $2,870 from
fees earned for the second half of
December.
5 31 Cas 11 2 80 00
6 Fees Earned 41 2 80 00
7 Received fees from customers.
8
Dec. 31 NetSolutions earned $1,120 on
account for the second half of
December.
Date Description Debit Credit
May 5 Supplies 12,500
Accounts Payable 12,500
u
Correcting Errors ² An Example
Date Description Debit Credit
May 5 Supplies 12,500
Accounts Payable 12,500
Date Description Debit Credit
May 5 Supplies 12,500
Accounts Payable 12,500
mhe Ônd