Journal Entries Hacks 🧐. Two Methods to NEVER forget Debits and Credits
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- Опубликовано: 2 июл 2022
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In this video I show you the 2 best ways to ALWAYS remember your Debit & Credits, including how to do so using the Accounting Equation.
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In India we have 3 rules for journal entries
1- Debit what comes in
Credit what goes out
(For example you buy a new computer for 5000 so computer comes in your business so DR and cash goes out so CR)
2- Debit the receiver
Credit the giver
(This is mainly used for your bills let’s say you bought goods worth 3000 on credit from John. Now here john is the giver of the goods so he goes CR and purchase of goods comes in your business so DR)
3- Debit the expense
Credit the income
(For example you have to pay 10000 salary so you made an expense so you DR salary and money goes out of the business so cash/bank will become CR.
Another example having two rules in one journal entry would be Let’s say that you received 100 as dividend so here Credit the income dividend would be CR and debit what comes in so cash comes in it would be cash/bank DR)
Hope you guys found it helpful
i'm from india as well.. yep golden rules of accounting really helps one to understand when doing journels or direclty positng in the ledger.
Sooo helpful thank you!
Thank you. How about an example with cash over/short amount. How to make entries using checking account.
thanks alot, was really helpfull!
❤❤❤
You just blew my mind away by explaining the Dealer method in the accounting equation. I now understand how they relate. I have got a lecture on accounting so this was extremely helpful. I about half way through my accounting degree and this helped me understand when I am doing entries how to classify where they go. My professor actually told me about your videos! Thank you!
Not me pausing your video and answering your questions to test my knowledge! hahaha I wish I could save your whole channel. Thank you 🥲
Thanks GI!
This is the first genuine explanation from first principles that I've come across on the internet.
Thanks brother
Please put more videos on accruals income and expenses, prepayment income and expenses. How do we treat in the regular organisation transactions. What are the JEs. Treatment in financial statements.
I’ve always said that double entry accounting, and the accounting equation is sublimely beautiful.
Haha I like it!
I love it. Your channel is excellent. I remember my first accounting class and I remember how I understood everything. 🙂
Thanks you so much. I am truly appreciative of the time you took to do this. I have ptsd from accounting in HS. ❤😊
Super Simple ! Thanks Bill for making it very easy.
I’m accounting 2 right now. This is the best channel I have found for studying!
This video is golden, I'm about to graduate in Accounting and I have my last big exam tomorrow, this is a quick refresher. Thank you!
(Owner's) Equity for me was tricky to grasp.
The accounting equation A=L+E is algebraic, meaning you can say:
Assets-Liabilities=Equity .
A-L=E
So now what are the main components of equity?
Equity = Contributed Capital + Retained Earnings
I'm no accountant, but I run a small business. My current understanding of this: When my company sells a $10,000 project, for reporting it must equal my costs for the project ($3,000) plus my equity ($7,000). $10,000 = $3,000 + $7,000.
I found the equal and opposite force analogy incredibly useful in moving forward in being able to implicitly understand journals and DE accounting when I first started, DEADCLIC just always seemed so clunky!
I was waiting on examples. 👏👏 Thank you!!!
Thank u for explaining the 2methods lots of clarity on the concept 👍
Excellent videos! I don't know anything about accounting but I can understand easliy with your explaination!
The Accounting Equation, 100%. But thank you for showing both. Keep up the great work.
This was great !!! Thank you!
This is the best video ever. Thank you so much. No one has ever explained it this before.
Thanks Harleen!
This is really good stuff, made it so simple, thanks!
Thank youu, it's really useful video. I enjoy it. We need more videos.
Your videos are helping me alot … Thank you so much 😊
Thank you for covering all of this, can't wait to start using some of this once I finish my schooling!
Thanks Brent
This is indeed the simplest way to remember how it works! 👍😊
Thank you so much!! I have midterms coming up and You really helped me to understand journals, debits and credits. I am extremely grateful.
You are so welcome!
"Owner's Equity is what you owe to the business owners" ...finally this formula makes sense!
I cam here just to thank you for this quote. It should be written on every accounting text front cover.
I was taught method 2 in college, and it makes the most sense to me, and to me it seems like common knowledge.
Thanks for the video. I learned this a long time ago but I was surprised when the bank used the term credit (to my bank account) whenever I deposited money. I asked my accounting teacher why they were doing it backwards and he took the time to explain to me the differences in the recording especially for third parties. And oh I think the Div in the acrostic (DEALER) needs a qualifier since you're referring to a Dividend expense the reverse would be true for a Dividend Income which is rare but could actually happen.
You are awesome! I love you! Thank you!
Thanks bill, Appreciate the explainations on data flow, Great stuff mate.
Glad you enjoyed it
This is my first time seeing the DEALER acronym. Thanks for the additional insight. #RookieAccountant
Thank you so much for the video
Eg.4 AR is affected by credit sales rather than cash,so relevant accounts should be Revenue and cash/Bank,
Credit and debit respectively
Thanks .You re Amazing!
Great and So useful 🔥🔥♥️
Excellent. Great info, clear explanatoins!
Thank you!
Thank you. Going to school for accounting now and this is helpful ☺️
Best of luck Latoya
This guy is solid thanks for the videos
As an accounts clerk this is so helpful, thank you.
Thanks it's helping me
Awesome explanation 👌 always accounting equation helps. Not the dealer method as it's confusing sometimes.
Amazing video. Accounting equation so beautifully explained 🙏🏻
Thanks so much!
So useful!!! Thanks a million!!! I think I finally get it😅❤🙏
This is fascinating it's simple and clear
Thanks very much and I need a video on ledger account
This video helped me a lot in my work. Thank you
Glad to hear it!
They don't teach Dealer at my school, but I've been tutoring for the last 4 terms and it's the first thing I teach anyone in accounting 101. I'll have to practice seeing how I can break down the accounting equation in a more helpful way.
Very well explained 👌
Glad you liked it
Thanks for sharing
Best explanation. Thank you
Glad you think so!
Men, thank you so much this is very helpful
Thank you so much for such wonderful tutorials. I've been an accounting clerk and really never understood the concept of accounting. I was just like a robot matching, entering invoices into the system. Until one day, I woke up wanting to learn more and more about accounting, how the payable process impacts the financial statement and oh boy... and now I just want to keep learning. Thank you again for your videos!! Super helpful!!
Wow thank you!
I am understanding you very well so keep it up and thanks
It's my pleasure
Thanks!
Hello Bill. I have been enjoying watching your finance and accounting videos. Could you please post a video on explaining inter-company transactions with particular example on software sales between affiliated companies and their impact on balance sheet, income statement and cash flow statement. Thanks a lot in advance.
Great suggestion!
wow U explain such a simple way. You are an amazing teacher. still confuse after waching your video all concept is so clear.
Glad to hear that!
excellent
this is IT! this that video! it clicks here!
thank you very much
I 🙏🙏🙏🙏🙏
it is easy way to know debit and credit account (DEALER)
it took me a long time to memorize it
Before
Thanks!
Hi thank you, I’m a junior in my university and my major is accounting
Hi,
Many thanks for this. Really helps.
Does this technique and method and your courses work for UK accounting rules and regulations please?
Thanks
boooom in my brain jajajaj thank I am a new fan for your videos !!!
My method is similar to your #2
Assets Expenses AE +Dr
Owners equity, Income & Liability OIL +Cr
AE vs OIL
Dr - Cr
We use this system in my MBA
Your videos are amazing. I have subscribed and am considering the 5 hour course! One basic accounting tenet which I cannot get through my dense skull is why $100k cash coming into my business is recorded as a debit. It seems so obvious to me that the extra cash is only a credit. Is it just a term that doesn’t actually mean “debit”?
Welcome aboard! When cash goes up, a bank statement calls it "Credit" because from the bank perspective, they owe this money to us, therefore it's a liability and liabilities are "Credit" nature. We call it "Debit" on our books because it's an asset and assets have "Debit" nature. Hope to see you in the online course Chris!
May be you should explain equation through ..... Business point of View ..... Business owner becomes the Part inside the equation .....
so the accountant becomes ..... a business ..... who keep its own records ..... in interactions with other business and other entities .....
just my thoughts .... I am from Maths background ....
Good work CPA BILL HANNA, learning from Kenya
Hi, I need your help to undertstand that in case of any uncollectibles from customer is recorded as Bad debts but in the books of Customer what accounting entry has to be passed for this?
Hi! I recently stumbled across your videos. I’m starting at Big Four in tax this Fall. Any chance you can go over exit opportunities or how to go from tax accountant to controller? I feel like most of your videos go from audit to controller. Am I limiting myself by going into tax?
Tax has diff exit opps. I will try to cover
What are the e best places to shadow an accountant during school?
Easiest way is to think of everything in cash. A debit to cash increases it therefore you can arrive at what makes anything else increase or decrease.
Please create a video on how to be an accounts payable staff and what they do on a daily basis.
Thanks!
I already have a video on the channel for accounts payable
Dr the cash and Cr the equipment right?
Please talk about getting a certificate from corporate financial institute for financial analyst
At first in class I was confused on homework where up/ down arrows increase / decrease and what goes where.
I am new to your channel my question is additional budget which was debited under revenue my question there is a negative amount from one of the consultancy budget which was posted under revenue column a little confused is this not a withdrawal account because it was deducted from the allotted budget? I am questioning to where they used the deducted amount the answere was they use it to pay the deficit my question again how come that the negative amount was used to cover up deficit what I said you put but still the same was taken this is the reason am questioning where this deduction was used Please sir kindly forward a detailed explaination for this I need more knowledge in auditing
Dividend is not always Assets it's only when you invest in stock as a Investor
is it okay if i say equity is what we own as a business?
For me the way how I get it practly and easy recognitions about any transaction Is deffinetly method 1
Could there be any situation where Equity is debited? which means it is reduced
I have six years commercial experience in accounting side. But i have not audit experience. I work as a accountant in private company and i have ACCA & BSC. Can i join audit firm?
13:00 t accounts for explaination
First time heard of dealer. I mostly heard dead! Debit = expenses, assets and dividends! So the rest are on the credit side!
I was completely understanding this assets=liabilities + equity thing.... until he started giving examples. Now I could not possibly be more confused because he seems to contradict his own statements multiple times throughout this video. :-(
The accounting equation is NOT the better method if you are already confused about it. The DEALER acronym is the only thing that made it click for me
He does not contradict anything…you are just confused about double entry accounting method.
Accounting is made hard in purpose for absolutely no reason.
There doesn't need to be all these crazy jargon.
Debits and credits is useless.
It should be simplified with only funds and cost or inflow and outflow
The money coming in doesn't really need to be troubled with. Of you are an old company u already have allocated monthly budgets that can be fixed unless a catastrophic emergency happens.
So all the inflow doesn't or shouldn't be touched if u are a good company, which can only be done if ur a private company because I won't be on the verge of bankruptcy every quarter .
All companies should have a prior year budget for example if in 2022 u made 1billion after taxes . If u already know the operation cost u can say okay this net earnings let's take 50million for budget for the 2023 year.
Now any incoming earnings or cash will not be touched and be left for the 2023 tax filing.
Any cost or debts can be paid with the 50 million that u already paid tax on in 2022.
This is why companies have so much tax troubles and errors happen. This is how I'm going to run my company. No need for all the jargon
Make a T on your paper Assets top L, Bottom of Assets put PP&/ Top R put Liabilites, bottom R Shares.
Anything on the left impacts the Right. Right also Impacts the Left.
Accounting equation
Sorry, but I am asking a stupid question. @12:55 , cash/computer purchase transaction.
Cash reduced= can we not take as Expense increased ?????
Plz help 😢
The basic rule is...
First you consider What is coming into the business....
For example computer purchased for cash
1st try to see what is coming into the business
Computer is coming
So computer Asset will increase
So computer account I'd debit
And cash account is created
How would the purchasing of computers affect owner's equity?
No impact on equity
@@TheFinancialController thanks for responding. I figured it out after i asked the question.
why when cash goes down, it is still credit?
In college, was never taught the DEALER acronym.
Waiting for your 100k subscriber mark.
Same here haha
👍
What if instead of div we say drawimg
Asset - inc =Dr ; dec= Cr
Liability- inc= Cr ; dec= Dr
Capital- inc= Cr; dec= Dr
Expense - inc= Dr ; dec= Cr
Income- inc= Cr ; dec =Dr
Good summary
❤❤
I tried sending you an email (copy+pasted from your website) and it keeps failing! Is there another email I can reach? Thank you!
Hmmm strange I just tested it and it works
@@TheFinancialController will try again then :) thank you!
What does dividant mean
Profit of share holders
Teaching a man to fish. Brilliant
More whiteboard videos like this. These teaching videos are very helpful. Make more of them
Some of your references are not what we are being taught as international accounting terms.
When you make reference to Dividends, can you explain what the dividend actually is. I understand a dividend as a sum of money that is awarded to a person, it’s also different from a salary and owners own Drawings.
God, i could KISS you. I so get it now. after a good 8 videos, i get it now! THANK YOU, sir
This is a cheat code 😅