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- 1. LEDGER ACCOUNT
- An account is a device to record all the changes to a particular item.
- All the accounts are kept together in a ledger.
- Cash@Bank
- accountname/account title
- 2. RULES IN ACCOUNTING
- 1) each type of account has been given a nature
- total db = total cr
- ASSETS | DEBIT NATURE (DB)
- LIABILITY | CREDIT NATURE (CR)
- OWNER'S EQUITY | CR
- REVENUE | CR
- EXPENSES | DB
- CAPITAL | CR
- DRAWINGS | DB
- 2) increases recorded on the same side follow the nature of account
- ASSETS | DEBIT NATURE (DB)
- LIABILITY | CREDIT NATURE (CR)
- OWNER'S EQUITY | CR
- REVENUE | CR
- EXPENSES | DB
- CAPITAL | CR
- DRAWINGS | DB
- 3) decreases recorded on the opposite side as the nature of account
- A | cr
- lia | db
- revenue | db
- oe | db
- expenses | cr
- capital | db
- drawings | cr
- 3. asds
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