ACCT 201 Chapter : ACCT Ch2
15 Mar 2019
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The normal balance of an account is the side used to record increases. An acronym for each of the types of accounts: Arrested executives devised: lies revealing corrupt schemes and reduced. Ethics: any account balance is the difference between the debits and the credits recorded in the account. Every account balance is derived from four components: beginning balance, + increases, - decreases, end balance. Double-entry accounting: total amount that is debited to accounts must equal the total amount credited to accounts for each transaction; therefore. Debits = credits: assets are on the left side of the equation; therefore the left or debit side is the normal balance for assets. 3. liabilities and equities are on the right side; therefore the right or credit side is the normal balance for liabilities and equity. 4. revenues, expenses and dividends are really changes in equity, but it is necessary to set up temporary accounts for each of these items to accumulate data for statements.
