Difference between revisions of "Financial account"
(→Chart of accounts) |
(→Rules of debit and credit) |
||
| Line 3: | Line 3: | ||
==Rules of debit and credit== | ==Rules of debit and credit== | ||
:''Main wikipage: [[Rules of debit and credit]]'' | :''Main wikipage: [[Rules of debit and credit]]'' | ||
| − | + | {|class="wikitable" width=30% style="align:right; text-align:center;" | |
| + | !Category | ||
| + | |Type | ||
| + | ![[Normal balance]] (Increase)!!Decrease | ||
| + | |- | ||
| + | |rowspan="3"|[[Principal account|Principal]] | ||
| + | ![[Assets]] | ||
| + | |Debit||Credit | ||
| + | |- | ||
| + | ![[Expenses]] | ||
| + | |Debit||Credit | ||
| + | |- | ||
| + | ![[Withdrawals]] | ||
| + | |Debit||Credit | ||
| + | |- | ||
| + | |rowspan="3"|[[Auxiliary account|Auxiliary]] | ||
| + | ![[Liabilities]] | ||
| + | |Credit||Debit | ||
| + | |- | ||
| + | ![[Capital]] | ||
| + | |Credit||Debit | ||
| + | |- | ||
| + | ![[Revenue]] | ||
| + | |Credit||Debit | ||
| + | |} | ||
*[[Principal account]]s, which are [[assets]], [[withdrawals]], and [[expenses]], are debited when they increase and credited when they decrease. | *[[Principal account]]s, which are [[assets]], [[withdrawals]], and [[expenses]], are debited when they increase and credited when they decrease. | ||
*[[Auxiliary account]]s, which are [[liabilities]], [[capital]], and [[revenue]], are debited when decrease and credited when they increase. | *[[Auxiliary account]]s, which are [[liabilities]], [[capital]], and [[revenue]], are debited when decrease and credited when they increase. | ||
Revision as of 02:03, 9 December 2018
A financial account (or, simply, account; hereinafter, the Account) is an accounting device used in bookkeeping to record increases and decreases of business transactions relating to assets, liabilities, capital, withdrawals, revenue, and/or expenses. In other words, the Account is the concept that is used to record financial entries of a similar nature such as cash increases (debits) and decreases (credits) or, vice versa, accounts payable increases (credits) and decreases (debits).
Rules of debit and credit
- Main wikipage: Rules of debit and credit
| Category | Type | Normal balance (Increase) | Decrease |
|---|---|---|---|
| Principal | Assets | Debit | Credit |
| Expenses | Debit | Credit | |
| Withdrawals | Debit | Credit | |
| Auxiliary | Liabilities | Credit | Debit |
| Capital | Credit | Debit | |
| Revenue | Credit | Debit |
- Principal accounts, which are assets, withdrawals, and expenses, are debited when they increase and credited when they decrease.
- Auxiliary accounts, which are liabilities, capital, and revenue, are debited when decrease and credited when they increase.
Chart of accounts
- Main wikipage: Chart of accounts
Every organization can establish its own list of account titles, which is called the chart of accounts.
