Traders are required to maintain a variety of books for managing business accounts that are as follows:
(2) Ledger (to be disclosed in another article)
For a journal to be studied, certain related terms should be studied along with the accounting process, which are:  Transactions affect funds. Revenues increase cash flow and payments reduce the funds. Instead of increasing or decreasing the balance after each transaction, all increments in a column and all entries can be sorted into another column and you can only find the balance if needed. Very convenient and time-saving.
During accounting, the device belonging to the account is used for this purpose. The simple account number is called a T-Account. Increasing cash is on the left, and on the right side is reduced, the closing balance has been determined by deducting the full payment on the left.
Accounts Accounting and Accounting
As the above account form clearly consists of two parts: the left is known as "load" and is known as the right "credit side".
Amounts charged to the debit page (left page) are called debits and amounts on the right side of the credit page. & # 39; load & # 39; means that an entity is on the left side of an account & quot; & quot; & quot; & quot; Lending means placing a post on the right side of the account.
The collection and lending have no other meanings in accounting
The concept of dual consideration in accounting means that all accounting transactions are expressed in terms of debt and equal and opposite amounts of credit. Thus, the rule is that the amount of the debt of each transaction Debt and Loan Equity may be expressed in the form of a formula:
Debit = Loan
The following accounting equation was discussed in the previous article:
AL = P
Liabilities = Proprietor & If individual accounts are to be considered in isolation, there would be no difference that the increments were ab on the side or at the credit side, but as the accounts are interdependent, the recording system should be increased and reduced on both sides. The increase in asset accounts in the traditional or usual way is recorded on the debit side, while liabilities and capital increase on the credit side. This rule ensures that when the amount of account balances is the same, it confirms the accounting equation discussed above.
Creates the following rules:.
first On the asset accounts, the increase in debt and the decline in loans.
2nd The obligations on the increase in the accounts of loans, the reductions are burdens.
3rd The Owner's capital requirements to increase credit, the decline in debt.
The full range of business accounts includes assets, liabilities, and owner-related costs, losses, revenue and gains. Loan and Loan-Related Assets, Liabilities and Capital rules are described above and the costs / losses and income / gain rules can be derived from the same.
4th Expenditure on expenses / losses is a burden.
Since incurring and suffered expenses and losses lead to frictions related to the reduction of capital and the owner's equity, the increase in the accounts for expenses and losses is a Debit.
5th Revenues / Profit Accounts Growth Loans.
Given that revenue and gains in revenue increase your capital and increase the owner's equity capital, these are the credits, so your earnings and profit accounts increase your loans.
The above debit and credit rules are based on the accounting equation technique. The traditional rules of charging and lending are based on the classification of invoices. These rules in practice give the same results
and work in the same way. They only brake the situation differently.
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