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Accounting Matrix

Normal balance Examples Description


Assets ● Cash. Anything the company owns
● Stock.
Debit ● Building. that has monetary value. These
● Machinery. are listed in order of liquidity,
● Equipment from cash (the most liquid) to
land (least liquid)

Liabilities ● Bank debt. All debts that a company has


● Mortgage debt.
● Money owed to suppliers yet to pay are referred to as
(accounts payable) Liabilities. Common liabilities
Credit ● Wages owed. include Accounts Payable,
● Taxes owed
Payroll, and Loans

Owners’ ● Common Stock. Equity denotes the value left


Equity ● Preferred Stock.
● Retained Earnings. over after liabilities have been
removed. Recall the equation
Credit
Assets = Liabilities + Equity. If
you take your Assets and
subtract your Liabilities, you
are left with Equity, which is
the portion of the company
that is owned by the investors
and owners

Owners’ Owner withdrawals are the distributions


Withdrawal that you as a business owner -- sole
proprietor, member, partner or
shareholder -- take from your business's
retained earnings for personal use. The
Debit actual payment is made from your
company's cash flow or cash account

Revenue ● Sales. Revenue is any money earned


● Rent revenue.
Credit ● Dividend revenue. by the business
● Interest revenue.

Expenses ● Cost of goods sold. An Expense is any cost


● Sales commissions expense.
● Delivery expense. incurred by the business
● Rent expense.
Debit ● Salaries expense.
● Advertising expense.