ACCT 121 Lecture 2: Chap 2 Part 1
Document Summary
Individual accounting record of increases and decreases in a specific asset, liability, or stockholders" equity item: for example, softbyte inc. would have separate accounts for cash, accounts. Receivable, accounts payable, service revenue, salaries and wages expense, and so on. (note that whenever we are referring to a specific account, we capitalize the name. ) In its simplest form, an account consists of three parts: (1) a title, (2) a left or debit side, and (3) a right or credit side. Because the format of an account resembles the letter t, we refer to it as a t account. Debits and credits: debit indicates the left side of an account, credit indicates the right side. They are commonly abbreviated as dr. for debit and cr. for credit. They do not mean increase or decrease, as is commonly thought.