Knowledge Points Involved In Debit And Credit Bookkeeping

Each account has a special format, which strictly reflects certain economic content.

With the continuous occurrence of economic business, these contents change accordingly. This change needs to be reflected in accounts.

Accounts can generally be divided into two parties, one side reflects the increase and the other side reflects the reduction.

If the amount of increase is recorded on the left side, the reduction should be recorded on the right side.

On the contrary, if the amount of increase is recorded on the right side, the amount of reduction should be recorded on the left side.

Which party records the increase in the two party of the specific account, and which side records the amount of reduction depends on the economic content recorded in each account and the accounting scheme adopted.

In addition, the format of accounts should include: (1) account names and numbers (2) the date and summary of economic pactions (3) the number of credentials, that is, the source and basis of account records (4) the amount of money added to the account is increased, and each account has four elements, the initial balance, the balance at the end of the period, the increase in the current period and the decrease in the current period.

The amount of the increase or decrease registered on the left side and the right side is called the amount incurred in the current period, and shall be settled at the end of the maturity.

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The current balance at the end of the current period is the next balance.

The relationship between the four amounts is:

Ending balance = initial balance + current increment - current reduction

The amount of the current account reflects the increase or decrease of the accounting content in the period, while the ending balance reflects the result of the change.

The balance of accounts is usually in the same direction as the increase in records.

Accounts

Depends on the accounting method adopted.

The accounting standards for enterprises stipulates the method of borrowing and recording accounts and its "three column" account format.

Accountants have six elements: assets, liabilities, owners' equity, income, expenses and profits.

Correspondingly, accounts can also be divided into six categories: assets, liabilities, owners' equity, income, cost and profit.

Profit accounts include accounts such as "profit" and "profit distribution". They are of the same nature as owners' equity accounts, and can be incorporated into owners' equity accounts.

In this way, the accounts can be classified into five categories: assets, liabilities, owners' equity, income and cost categories according to the classification of accounting elements.

Assets account is used to reflect changes and balances of assets.

The amount of the account reflects the increase or decrease of the assets. The balance of the account reflects the balance of assets.

Similarly,

The amount of account reflects the change of liabilities. The balance of the account reflects the outstanding debt.

The owner's equity includes investment capital and undistributed profit.

The revenue account is used to collect the income of the enterprise.

A cost account is used to collect the cost of an enterprise.