ACCOUNTING EQUATION

Assets = Liabilities + Owner’s Equity

 DOUBLE ENTRY SYSTEM

For every value received, there is a value parted;

for every debit entry, there is a corresponding
credit entry.
 NORMAL BALANCE
DEBIT CREDIT
Increase Assets Decrease Assets
Decrease Liabilities Increase Liabilities
Decrease Ownership Increase Ownership
Decrease Revenue Increase Revenue
Increase Expenses Decrease Expenses
ASSETS DEBIT
LIABILITIES CREDIT
REVENUE CREDIT
EXPENSES DEBIT
OWNER’S INVESTMENT CREDIT
OWNER’S WITHDRAWAL DEBIT
CHART OF ACCOUNTS
CHART OF ACCOUNTS