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4.2 Debit/ Credit Theory. Debit An entry recording an amount owed, listed on the left-hand side or column of an account. Credit The ability to obtain goods or services before payment, based on the trust that payment will be made in the future: "unlimited credit". Review of Debit & Credit.
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Debit • An entry recording an amount owed, listed on the left-hand side or column of an account. • Credit • The ability to obtain goods or services before payment, based on the trust that payment will be made in the future: "unlimited credit". Review of Debit & Credit
View the video to get an understanding Debit/ Credit Theory
Assets + = Liabilities Owner’s Equity - Increase Decrease - - + + + Debit (DR) Credit (CR) Debit Debit Credit Credit Write at top of handout
Any item on the balance sheet that records changes from that item. • LEDGER Group of accounts 4.1 Accounts
Assets are increased on the debit side • Liabilities are increase on the credit side • Owner’s Equity is increase on the credit side Increases
Assets are decreased on the credit side • Liabilities are decreased on the debit side • Owner’s Equity is decrease on the debit side Decreases
Accounts are increase on the side they appear in the fundament accounting equation Assets = Liabilities + Owner’s Equity
Accounts are decreased on the opposite side to which they appear in the equation
Complete exercise #1 p. 91 (t), p. 35 (w) • Fill in the boxes with + or -
Complete Ex. 4 pg. 92-93 (t) pg. 36(w)Use back side of journal paper to journalize each transaction Crooks Garage