by๎Miles๎Derksen๎
Accounting๎Cheat๎Sheet๎๎
This๎is๎my๎simple๎Cheat๎Sheet๎for๎accounting๎that๎will๎serve๎a๎great๎reminder๎of๎basic๎accounting๎
principles.๎Please๎keep๎it๎with๎you๎and๎use๎it๎throughout๎the๎course.๎
I. The๎Accounting๎Equation๎
Assets = Liabilities + Ownerโs Equity
This๎MUST๎BE๎True๎for๎EVERY๎transaction๎no๎matter๎what๎it๎is.๎This๎principle๎can๎never๎be๎
violated.๎Therefore,๎if๎you๎make๎an๎entry๎into๎your๎general๎journal๎and๎your๎accounting๎
equation๎doesnโt๎hold๎trueโฆ๎then๎you๎have๎done๎something๎wrong!๎
๎
Debits = Credits
๎This๎must๎also๎be๎true๎in๎every๎case๎โ๎all๎transactions๎or๎you๎have๎done๎something๎WRONG.๎
II. Debit/Credits๎โ๎Increase/Decrease๎๎
Use๎this๎as๎a๎guide๎when๎working๎with๎accounts:๎
๎
Note๎that๎the๎Assets๎and๎Expenses๎are๎the๎same๎colour๎โ๎why?๎๎Because๎they๎behave๎the๎same๎
way๎in๎the๎accounting๎system๎that๎we๎use.๎This๎can๎be๎confusing๎for๎the๎accounting๎student๎
since๎they๎are๎often๎viewed๎as๎oppositesโฆ๎why๎would๎an๎expense๎be๎a๎debit๎just๎like๎an๎Assetโฆ๎
after๎all๎an๎Asset๎will๎increase๎the๎companiesโ๎Net๎Worth๎while๎an๎expense๎will๎decrease๎it.๎
Account๎Type๎Assets๎Liabilities๎Owners๎Equity๎Revenue๎Expenses๎
Examples๎of๎
Cash,๎๎Acts๎Rec,๎
Land,๎Supplies,๎
Equipment๎
Acts๎Pay,๎
Mortgage,๎Bank๎
Loan๎
Capital๎Sales,๎Fees๎Earned๎
Sales๎from๎Service๎
Rent,๎Insurance,๎
Repairs๎etcโฆ๎
Increase๎on๎Debit๎/Left๎Side๎Credit/Right๎Side๎Credit/Right๎Side๎Credit/Right๎Side๎Debit/Left๎Side๎
Decrease๎on๎Credit/Right๎Side๎Debit๎/Left๎Side๎Debit๎/Left๎Side๎Debit๎/Left๎Side๎Credit/Right๎Side๎
Exceptions๎Accumulated๎
Depreciation๎๎Drawings๎ ๎ ๎
