Golden Equation:ASSETS=Liabilities+EQUITY
ⓘ
Debit simply means the left side of the equation, and Credit means the right side. Accounts increase on their home side.
⚖️
Assets$0
(DR) Debit ↑ Assets
Debiting an asset account makes it go up
Assets
=
Liabilities + Equity$0
(CR) Credit ↑ Liabilities & Equity
Crediting these accounts makes them go up
LiabilitiesEquity
📓Journal Entry
📒
Click any transaction to see its journal entry here
What the business OWNS
Assets
↑ Increases with DR · ↓ Decreases with CR
💵Cash
$0
📋Accounts Receivable
$0
📦Inventory
$0
🔧Equipment
$0
🛡️Prepaid Insurance
$0
📉Accum. Depreciation↓ Asset
$0
What it OWES
Liabilities
↑ Increases with CR · ↓ Decreases with DR
📄Accounts Payable
$0
🏦Loan Payable
$0
📬Unearned Revenue
$0
🏛️Sales Tax Payable
$0
⏰Interest Payable
$0
Owner's STAKE
Equity
↑ Increases with CR · ↓ Decreases with DR
👤Owner's Capital
$0
📈Revenue
$0
Equity ReducersDR to increase
🏠Rent Expense
$0
👥Salaries Expense
$0
⚙️Depreciation Expense
$0
🗑️Inventory Loss
$0
💸Interest Expense
$0
↩️Sales Returns
$0
💼Owner's Draw
$0
🏷️Cost of Goods Sold
$0
Net Equity = Capital + Revenue − Expenses
Every transaction keeps Assets = Liabilities + Equity — always.