Reader Interactions
Comments
Leave a Reply
You must be logged in to post a comment.
Free ACCA & CIMA online courses from OpenTuition
Free Notes, Lectures, Tests and Forums for ACCA and CIMA exams
Free ACCA & CIMA online courses from OpenTuition
Free Notes, Lectures, Tests and Forums for ACCA and CIMA exams
Best explanation ever. I am understanding accounting like never before.
Thank you for your comment 馃檪
Hi Sir,
Hope your in good health and spirits. Question on last entry of drawings. Is this treated in same manner as dividends? I.e it is part of owners equity which essentially increases with credit but as it reduces equity it is seen as a contra asset account hence increased with debit? Also in equations it is in credit side but with a negative, increase in net assets=capital+profit-drawings.
Thanks in advance
Really indebted to you, professor!
sir you credited sales it that means sales is decreased and when income decreased must be credited? but hows that fits the three rules of credit thanks
Sales is an income account. When you credit income, you increase it.
I think you credit income because sales/profit belongs to the owner or shareholders of the business so is now capital (owed to the owners) essentially a liability from the businesses perspective. And back to the entry credit rule ‘an increase in a liability’ which is the profit.