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Bookkeeping Debits and Credits in the Accounts


Printing Plus provided the, which means the company can recognize revenue as earned in the Service Revenue account. Service Revenue increases equity; therefore, Service Revenue increases on the credit side.

What is the effect in cash if the business rendered services on account?

If a business receives cash for rendered services, it increases the company's assets. Service revenue generates income, which increases the company's capital. accounts payable to increase the total in the account. We now return to our company example of Printing Plus, Lynn Sanders’ printing service company. We will analyze and record each of the transactions for her business and discuss how this impacts the financial statements. Some of the listed transactions have been ones we have seen throughout this chapter.

The Basics of Double Entry

The equation remains in balance since ASC’s assets have been reduced by $100 and so has the owner’s equity. The following examples are for the same business.

cash $

The company’s assets are equal to the sum of its liabilities and equity. As you see, ASI’s assets increase by $10,000 and stockholders’ equity increases by the same amount. As a result, the accounting equation will be in balance.

The Basics 1. Accounting Equation

Not affect stockholders’ equity. Decrease net income. A company received $1,253 cash for services provided. When stockholders invest cash in a business, what is the effect? Liabilities increase and stockholders’ equity increases.

Dividends, liabilities, and assets. Expenses, dividends, and stockholders’ equity. Assets, dividends, and expenses. Which of the accounts are decreased on the debit side and increased on the credit side? Which of the following transactions would cause a decrease in both assets and stockholders’ equity?