Asked Aug 19, 2019

How do you know which account debits and credits go in? 

How do you log into the general journal? General ledger?

How do you do the income statements and balance sheets?


Expert Answer

Step 1

We’ll answer the first question since the exact one wasn’t specified. Please submit a new question specifying the one you’d like answered.

Step 2

The accountancy process begins with passing journal entries. There are three golden rules of accounting which must be learnt before beginning to do accounts

1. Personal Accounts- Debit the giver and credit the receiver. Personal Account means an account relating to a person like Harry, Peter etc.

2. Real Accounts- Debit what comes in and credit was goes out. Real Accounts relate to any account which exists in real like Cash, building, land etc.

3. Nominal Accounts-Debit all expenses and losses and credit all income and gains. Nominal account relates to all items of expenses like stationery purchased, cost of goods sold and revenues like sales, interest received.

Step 3

let us understnd these with few entries-

a) Say, Sophie my friend gives me stock worth $5,000

 So, there are two accounts involved Sophie and Stock/Inventory. Sophie is a person and so a personal account and since she has given materials, she needs to be credited. Stock is a real account and since it has come in the business, it is debited

b) I ...

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