Revenue | QB Scott

For the image below, total Debits less total Credits equal the Account Balance. So, in the example in the image, total Debits of 2,675 less total Credits of 275 equal 2,400. This is a Debit amount since, in this example, Debits are greater than Credits.

All Debits and Credits are tracked in an Account’s T-Account. When tracked properly, it’s easy to figure out the balance of an account.

Each Account has it’s own T-Account. This allows proper transaction tracking of Debits and Credits.

A T-Account visually represents the impact transactions have on a particular account. As seen in the image, the white “T” allows space for an Account Name (at the top), Debit Side (Left), and Credit Side (Right). It’s a simple visual that helps when trying to understand the balance of an account.

Debits must always equal Credits. On every transaction the total of the Debits must equal the total of the Credits. In some transactions you may have more than one Debit and only one Credit. Or you may have one Debit and more than one Credit. Regardless the total value of Debits must equal the total…

The Journal Entry is used to record a transaction. It must include at least one Debit and least one Credit. The Debits and the Credits in the Journal Entry must equal. Journal Entries are used all throughout accounting.

Credits are the opposite of Debits. Credit increase Liabilities, Equity Accounts, and Revenue Accounts. They also decrease Assets and Expense Accounts.

Learning about Debits (abbreviated DR) and Credits (abbreviated CR) can be confusing. However, if you keep in mind that Debits increase Asset and Expense accounts and decrease Liabilities, Equity Accounts, and Revenue Accounts, you’ll be half way there to understanding Debits and Credits.

Expenses are what a company has incurred or used up and are shown on a Profit and Loss Report. Expenses can include Rent, Payroll, Utilities, and Supplies.

Revenue is what a company has earned and is shown on a Profit and Loss Report. Revenue can include Sales, Interest Income, and Rent Income.

Posts Tagged ‘Revenue’

T-Account Example

What T-Accounts do

How T-Accounts help

Anatomy of a T-Account

Debits = Credits

What’s a Journal Entry?

Credits (CR)

Debits (DR)

Examples of Expenses

Examples of Revenue