accounting

Debits and credits, Equity (finance)

“Is there an increase or decrease in the first account involved in the transaction?

Should I record that increase or decrease with a debit or a credit?”

Answer: Cash increases. Cash is an asset, and assets have a debit balance. We record an

increase in cash with a debit to the Cash account.

2. “Is there an increase or decrease in the second account involved in the transaction? Is

that increase or decrease recorded with a debit or a credit?”

Answer: Common stock increases. Common Stock is a stockholders' equity account, and

stockholders' equity has a credit balance. We record an increase in common stock with

acredit to the Common Stock account.

3. Do total debits equal total credits?

Answer: Yes.
“Is there an increase or decrease in the first account involved in the transaction?

Should I record that increase or decrease with a debit or a credit?”

Answer: Cash increases. Cash is an asset, and assets have a debit balance. We record an

increase in cash with a debit to the Cash account.

2. “Is there an increase or decrease in the second account involved in the transaction? Is

that increase or decrease recorded with a debit or a credit?”

Answer: Common stock increases. Common Stock is a stockholders' equity account, and

stockholders' equity has a credit balance. We record an increase in common stock with

acredit to the Common Stock account.

3. Do total debits equal total credits?

Answer: Yes.
“Is there an increase or decrease in the first account involved in the transaction?

Should I record that increase or decrease with a debit or a credit?”

Answer: Cash increases. Cash is an asset, and assets have a debit balance. We record an

increase in cash with a debit to the Cash account.

2. “Is there an increase or decrease in the second account involved in the transaction? Is

that increase or decrease recorded with a debit or a credit?”

Answer: Common stock increases. Common...
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