Jacksonville CPA | Balancing Your Checkbooks
Good morning, my name is Brandon Mack, Roy, president of Jacksonville based tax and accounting firm, men Neva. If you’re Jacksonville CPA is not helping you grow your business in educating you on the things you need to know to achieve financial freedom and schedule a free consultation with Mineva. Today we are going through a lecture of the basics of accounting terms and principals and helping you understand things you need to to grow your business so you don’t have to be an expert. You just need to grasp the fundamentals of the counting process and formula. So for Jacksonville, CPA is just focused on getting your tax return in and out of his office and you feel like you need more than please schedule a free consultation with Neva.
Normal debit balance. Have a normal debit balance. Revenue has a normal credit balance. I know at first it seems a little bit inconsistent given that expenses are part of stockholders’ equity. I will try to clarify that as we go along. Okay, but do yourself a favor and commit these normal balances wherever you see the plus sign. That’s the normal bath for an account. So cash has a normal debit balance because if an asset accounts payable as a normal credit balance, because it’s a liability, common stock has a normal credit balance. Service revenue has a normal credit balance, rent expense as a debit balance, wage expense as a normal debit balance. The dividend account has a normal debit balance, then we’d go back to the computer.
Okay, so you will have to commit this to memory. You’ll be well served to do so. What we’re gonna do is we’re going to look at a another series of transactions and we’re going to actually start recording journal entries. Now what I’m going to suggest that you do is when you go back and look at these slides, I’m going to go back two slides. Make that well because it’s early. Whereas there we go. So this is slide 13. Sorry about that. This is a summary of all the transactions we’ve talked about earlier. I’m going to suggest that after I’ve gone through how we record journal entries, you record the journal entries for these transactions on your own and then post them to the general ledger t accounts and prepare a trial balance, which is exactly what we’re going to do now with another set of transactions. Okay, so I’m going to get to the current slide.
Okay.
I hope you can read this. I’ll hit the zoom in a couple of times and it says ABC Architects Inc, as licensed architect on April first 2010 during the personal.
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well of operations of the business. These events and transactions occurred. So what we’re gonna do is we’re going to record all these journal entries and once we’re done recording the journal entries, we’re going to post them to the t accounts in the ledger. Okay? So I’m going to go back to the board here. Whenever we record a journal entry
a proper,
and I’m going to abbreviate j e for journal entry format, whenever we record a journal entry, but the date and whichever account is going to be debited is listed first, and then we record the amount that gets debit, so you always put your debits first in a journal entry, doesn’t matter what account it is, if it gets debited, it goes first underneath the accounts that have been devastated. We would put the account or accounts
to be credited and we put a dollar amount in the credit column. Now notice I indented a little bit. Just a good idea. The account will be debited, always goes first underneath it, any accounts to be credited, a journal entry has to have at least two accounts. It can have more than two accounts. You can have two or three debits and one credit or one debit and two or three credits. That’s fine, but remember, your debits must equal your credits, so if you’ve got three debit and credit, add up the bits they have to equal whatever the amount credited was. Debits must always equal credits. Okay, so now we’re gonna. Look at the transactions on the board one by one, and we’re going to record these journal entries, so hopefully you wrote that down or took note. This is the proper journal entry format. We’re going to start actually recording journal entries. First Journal
stockholders invested $15,000 cash in exchange for common stock of the corporation April first. So I’m going to debit cash for 15,000
and underneath it and invented a little bit. I’m going to credit common stock. Now, what I think would be a good idea for you is to have all of your team,
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You accounts with the pluses and the minuses, the previous slides that we saw. Jacksonville CPA You should have that in front of you until it’s met properly, memorized, and you will see that anytime cash is increased, we have to debit. Now, let me go back to my comment I made earlier. When you go to the bank and you deposit money, they tell you that they’re going to credit your account and so that’s why a lot of people think, well, anytime you credit something, it’s an increase and that’s not true from the bank standpoint. Remember the bank is accounting for the bank. They’re not accounting for you. They do keep track of your records, but from the banks accounting standpoint, when you deposit money in the bank, that’s a liability. Your deposit account is a liability to the bank and if you look at your t accounts, you will notice that credit, a liability such as deposit account has a normal credit balance. So when their liability to you increases as a result of you depositing money, they say they’ll credit your account to show you that they’re recognizing that the liability to you has increased. Since you can withdraw that money anytime you want, and let’s take this concept a little further,
so if you don’t want to have financial liabilities but you want to be in great financial shape and your Jacksonville CPA is not helping you get there, then please give me the Neva a call so we can schedule a free consultation and diagnose and give you the information you need to run and grow your business.
You get a debit card and you go to the ATM with your debit card. When you withdraw money with the debit card, you’re taking money out of your account. From your standpoint. Cash should be credited since it’s going down from the bank standpoint, your account, your deposit account, which is a liability to them. They’re going to debit it to reduce the liability. Okay, so what they’re telling you is not incorrect. It’s simply they’re popping accounting from their standpoint, from their side of the transaction, but now that you’re in an accounting class, you have to account with account work from your side of the transaction. So when we deposit money in the bank, even though they’re crediting it, let them do whatever they want, we have to debit and credit common stuff. It’s our first journal entry, second journal entry, or excuse me, the second transaction says we hired a secretary at a salary of 30 slash 75 per week payable monthly, and this is a necessary and important events in any business, Jacksonville CPA but this is not an accounting transaction. Even though they’re going to pay him three 75 a week, that person has not yet worked. They simply had an interview.