Double Entry Bookkeeping & the T-Account

Debits Left side of the account Credit Right side of the account
Account
Debit Credit

General Ledger System

Asset
Debit

Liability
Credit

Stockholders Equity
Credit

Revenue
Credit

Expenses
Debit

The Journal

Accounting Cycle
Journal Entries The company receive $50,000 in Sales revenue on June 15. Journal
Date Journal Entry
Jun 15 Cash Sales Revenue To record cash sales

Debit
50,000

Credit
50,000

Accounting Cycle
Posting to the General Ledger
The company receive $50,000 in Sales revenue on June 15. Journal
Date Journal Entry
Jun 15 Cash Sales Revenue To record cash sales Cash Dr 50,000

Debit
50,000

Credit
50,000

Sales Revenue 50,000 Cr

Accounting Cycle
Journal Entries The company pays $5,000 for Advertising Expense on June 1. Journal
Date Journal Entry Debit Credit
5,000 Jun 1 Advertising Expense 5,000 Cash To record advertising expense

Accounting Cycle
Posting to the General Ledger The company pays $5,000 for Advertising Expense on June 1. Journal
Date Journal Entry Debit Credit
Jun 1 Advertising Expense 5,000 Cash 5,000 To record advertising expense Advertising Expense Cash Dr 5,000 5,000 Cr

Adjusting Entries
The step before Financial Statements

Adjusted Trial Balance

The framework for you Financial Statements