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Here we will study about What’s The Difference Between Debit And Credit In Accounting . In fact, there is no proper definition of Debit And Credit. But, you can use these two Accounting Terms to show  Left or Right Sides of the Accounts involved in the Business Transactions . Debit is for left side and credit is for right side of a T-Account. For recording transactions to concerned ledger' accounts, there are Debit And Credit Rules .   It is also important to note that both Debit and Credit Sides’ Balances of a t-account must be Matched, According To Double Entry System that says “For every Debit, there must be a Credit with Equal amount”. Due to this Double Entry System, both sides of Accounting Equation must be equal otherwise Accounting Records does not show true and fair view of Financial Statements of The Business to the Users of Financial Statements . You may also be interested in “ Single Entry Bookkeeping VS Double Entry Bookkeeping ” ...

Here we will study about “Is Accounts Receivable Classified Under Liabilities And Equity ”. You may also be interested in “ Is Accounts Receivable An Asset ” The answer to this Accounting Question is that Accounts Receivable is neither classified under Liabilities nor Equity but, in fact, Accounts Receivable is a Current Asset o n Balance Sheet which is convertible into Cash very quickly. Accounts Receivable is the amount of debts due from customers against the goods or services sold on credit / account basis. For Example, if the entrepreneur sold goods worth Rs. 50000 to Mr. A on Credit Basis and Mr. A agrees to make payment for the goods after 30 days, then it is a Business Transaction and it is related to Sale of goods on credit basis. The Customer, Mr. A is Accounts Receivable for the entrepreneur while Sales is the revenue which the entrepreneur will earn when the customer, Mr. A makes payment on due date. When the customer, Mr. A ma...

Previously, we studied about “ Accounts Receivable Subsidiary Ledger or Subledger , but here we are interested in another topic that is Accounts Payable Subsidiary Ledger or Subledger in Accounting. You may also be Interested in “ What is Accounts Payable ” Accounts Payable Subsidiary Ledger is the individual account of all of our suppliers or banks or financial institutions from whom the company purchased goods or services on Credit Basis. A separate account is maintained for every supplier of the company and all the balances of all these Subsidiary Ledgers are totaled and transferred to Main Account or Control Account of Accounts Payable. Then the Final Balance of Accounts Payable Control is transferred to Balance Sheet in the Current Accounting Period or Accounting Cycle. For the understanding this Subledger of Accounts Payable / Creditor, Let say that the company has three suppliers Mr. A, Mr. B And Mr. C. From Mr. A, the compan...

Here we will study about Accounts Receivable Subsidiary Ledger in Accounting. You may also be interested in “ Subsidiary Ledger VS General Ledger ” Accounts Receivable Subsidiary Ledger is, basically, the account of individuals persons or customers of the company. For Example, Mr. is the Customer, Mr. B and so on. Then individual account is maintained for each of individuals in the concerned Subsidiary or Sub-Ledger Account. e.g., Mr. A, Mr. B and so on. All the Balan ces of Subsidiary Ledgers of Customers are totaled or sum up and transferred to Accounts Receivable Control Account or Main Account or Master Account. Let Suppose, There are three Customers to whom the company ABC sold goods worth Rs. 100000. Rs. 30000 Sold Goods to Mr. A. Rs. 40000 To Mr. B And Rs. 30000 To Mr. C On Credit Basis. Then Subledger for Each of these customers are maintained by the company with their respective names as shown below: ...

Here we will study about the Modern Definition of Accounting . Accounting Definition By American Institute of Certified Public Accountants (AICPA) is very famous around the world as it describes the whole Process or Steps in the Accounting Cycle in which accounting exists in the business life of Smaller, middle and Larger Scale Compa nies or Corporations. These businesses include Sole Proprietorship, Entrepreneurship, Partnership, Companies, Organizations and Corporations. The Definition given by American Institute of Certified Public Accountants is shown below: “Accounting is the art of recording, classifying and summarizing in a significant manner and in terms of money, transactions and events, which are, in part at least, of a financial character and interpreting the result thereof”. The above definition can be written in a summarized way (which is Modern Definition of Accounting) as shown below: “Accounting is the Art of Identif...

Previously, we studied about “ Is Accounts Receivable A Revenue ”, but here we will study about the very important and basic Accounting Question that is, Is Accounts Receivable Accrued Revenue” or Accounts Receivable VS Accrued Revenue. The fundamental difference between Accounts Receivable And Accrued Income existed with respect to Sales And Income. The Accounting Term “Accounts Receivable” is used in case of Sales of goods or services or Assets, Plants, Supplies, etc., and The Accounting Term, “Accrued Revenue” is used in case of Income. Goods or Services sold for the purpose of earning revenue is called Sales or it is the price of goods sold or services rendered to customers on Cash or Credit Basis, Accounts Receivable is also created in case of Sales of Assets, Plants, Supplies that are used in the business and not for resale purposes while For Accrued Revenue we are concerned in income that is the amount left after deducting all the relevant...

Previously, we studied about “ Is Accounts Receivable An Asset ” in Accounting but here we are concerned with the very basic Accounting Question that is, “Is Accounts Receivable A Revenue”?   The answer to this very simple Accounting Question is that Accounts Receivable is not revenue because Accounts Receivable is the amount of debt due from the customers within the specified Accounting Period or Accounting Cycle while Revenue is the price of goods sold or services rendered by the business to customers on Cash Basis or Credit Basis. Accounts Receivable is a Current Asset which is convertible into cash very quickly. Actually, According To Accrual Basis of Accounting , all revenues and expenses are recorded whether Cash is received or Not. So, all those revenues against which the company still not received the Cash Payment from the customers are Accounts Receivable. When the company actually receives the Cash from Customers, then these bec...

Previously, we studied about “ Is Accounts Payable An Expense ”, but here we are interested in another important and basic Accounting Question that, whether Accounts Payable A Revenue Or Not”? Then answer to this question is, “No”, because Accounts Payable is the the mount of debt payable by the business to outsiders (Suppliers, Banks, Other Financial Institutions, etc.) of the business while revenue is the price of goods sold or services rendered by the business to customers for Cash or Credit Basis. According To Accrual Basis of Accounting , “All Expenses and Revenues are recorded whether Cash is received or not”. So, we when revenues are not received by the business, then these are Current Assets For the business. Similarly, when expenses remain unpaid it is a Current Liability and when actually paid for Cash, then these are an Expense for the business. For Example, the company providing Internet Services are the revenues for the company but due t...

Here we will study about the Question that is asked in the field of Accounting that, “Is Accounts Payable An Expense"? You may also be interested in “ Is Accounts Payable An Asset ”? The answer to this question is very easy and that is “No”, because Accounts Payable is the amount of debt or obligation payable by the business to outsiders (Suppliers, Banks, Financial Institutions, etc) for the goods purchased or services received on account.ads Accounts Payable VS Expense Expenses are the costs incurred for the purpose of earning revenue for the business while Current liability is the amount payable at future date. Expenses have no balance and closed to Income Statement or Profit And Loss Account while Accounts Payable / Creditor is Transferred to Balance Sheet untill it is fully paid. When Accounts Payable is Created, A Current Liability is created which is payable by the business. When the amount is repaid to suppliers or banks, then Accounts...