Leaning Online

Here we will study about Accounting Question that, “Incomes Debit Or Credit”? You may also be interested in “ Expenses Debit Or Credit ” When Income increases, we Credit it and when it decreases, we Debit it. When the business earns revenues, the business Credit it in the relevant Income Account. As income is the result of Profitable activities of Owners of the business, so income is adjusted with the Owner’s Equity or Equity in the Balance Sheet. So, income account has no balance and it is closed by transferring to Income Statement or Profit And Loss Account or Statement of Comprehensive Income at the End of Current Accounting Period. Following Closing Accounting Journal Entry is Passed in case of all of the Incomes of the business:                          Incomes / Revenues a/c   XXX                     ...

Here, we will study about Expenses Debit or Credit In Accounting. You may also be interested in “ Incomes Debit or Credit ” When Expense increases, we debit it and when expense decreases, we credit it according to Rules of Debit And Credit. For Expenses, normally, the Debit Balance is found by the business as expenses are incurring by the business on daily basis to operate the business and ultimately to earn revenues during the Current Accounting Period. But since the expense account is needed to be closed at the end of Current Accounting Period as these are the results of Profitable Activities of the Owners of the Business so, it is closed at the end of Current Accounting Period by transferring it to Income Statement or Profit & Loss Account or Statement of Comprehensive Income . So Expenses have no balances and it is adjusted with the Owner’s Equity or Equity in The Balance Sheet or Statement of Financial Position. Expense Account is clos...

What is Revenue Account In Accounting Here we will study about the Accounting Question that, “What is Income”? Revenue / Income Definition It is the price of goods sold or services rendered by the business to its customers. A business may receive Income in the form of Cash or Accounts Receivable / Debtor which is expected to be collected from customers in the form of Cash quickly in future within the Current Accounting Period. Note: T he Difference between Revenues And Expenses is Called Net Income / Net Profit  of the Business for the period. Income / Revenue Calculation 1. Revenues = Cash + Accounts Receivable While According To Matching Principle GAAP , Net I ncome is calculated from the following formula: Net Income / Profits = Revenues - Expenses I ncome / Revenue Journal Entry For Example, if the Furniture sold by the business For Rs. 500000, then the sales of Furniture is the inc...

What Is Cost Of Sales? You May  be eager to know the answer of this question, that " What Type of Account is Cost of Goods Sold (COGS)"? The a nswer is that  it is a Direct Expense  as it is incurred in bringing the goods in their saleable position. According to Matching Principle GAAP , “All the Expenses incurred in bringing the goods in their salesable position are parts of the costs of Revenue and must be set off with that revenue”. So, it is not a revenue but, in fact, incurred to earn revenue for the business during business operations.                                                  You may also be interested in “ What is Expense ” How To Calculate Cost of Goods Sold Cost of Sales or Cost of Goods Sold is calculated from the following formula in case of Finished Goods:         ...

What is An Expense Account / What Does Expense Mean Here we will study about the most important topic in Accounting that is “What is an Expense”? You may also be interested in “ Expenditures VS Expenses " Expense Definition Expenses are the costs incurred for the purpose of earning the Revenues . In expenses, at first, the business gets the benefit and then later on, the business makes the payment for that particular expense. Examples are Salaries, Telephone Bills, Electricity Bills, Fees Paid, Commission Paid, Rent Expenses, etc. These are also k nown as Revenue Expenditures . For Example, if the business paid Salaries To Employees During the Current Accounting Period For Rs. 1000000, then it is an Expense for the business and it is incurred for the purpose of operating the business effectively and ultimate generates sales for the business. Following Accounting Journal Entry is passed in the Book of Salaries ...

Do You Know About Cash / What is Cash In Hand / What is a Cash Account In Accounting Here we will study about “What is Cash in Accounting? Cash Definition And Meaning In Accounting, Cash is a Current Asset and it means any amount or payment received or paid in the form of money or currency other than Credit Payments And Receipts are Cash in Accounting. Credit Card Receipts And Payments are also considered as Cash Receipt And Cash Payments. Cash at Bank shows Cash deposited into the Company’s Bank Account while Cash in Hand shows Cash withdrawn from Bank Account of Company that is kept safe i n the custody of Chief Cashier and it is available for Cash Payments And Investments. You may also be interested in “ Bank Reconciliation Statement ” For Recording Cash Account Transactions Cash Book is Maintained that serves as a Journal as well as a Ledger . The ending balance is transferred to Balance Sheet Under Current Assets Sect...

Here we will study about What is Owner’s Equity or Equity in Accounting. Owner’s Equity is the right of owner or owners invested in the business. In case of Sole Proprietorship and Partnership Businesses, the term Owner’s Equity or Capital is used. while in case of Company, the term Equity is used. The Natural or Normal or Favourable Balance for Owner’s Equity or Equity is Credit and negative or Unfavourable Balance is Debit. When Owner’s Equity increases, we Credit it and when it decreases, we Debit it. Owner’s Equity is Calculated From Accounting Equation or Basic Accounting Equation or Fundamental Accounting Equation . The Accounting Equation Formula is show below: Assets = Liabilities + Equity From the above formula, we can get: Equity = Assets - Liabilities You may also be interested in “ How To Calculate Stockholders Equity ” Example, Mr. A is the Sole Proprietor who invested i...

Here we will study What is an Asset in Accounting or What does Asset mean in Accounting World? You may also be interested in “ What are Liabilities ” Assets Accounting Definition Assets are those resources or possession owned by the business that provide probable future benefits to the business in the coming Accounting Period. In Asset, the benefit will be get in near future. Assets are obtained by the business from two main sources. One is Liabilities and other one is Owner’s Equity or Simply Equity also called Capital in case of Sole Proprietorship. Assets Examples include Cash, Accounts Receivable , Inventory or Closing Stock , Plant And Machinery, Office Equipment, Furniture & Plant, Goodwill, Patents, Franchise etc. Rules of Debit And Credit For Assets The Natural Balance or Favourable Balance for Assets is Debit balance while Negative or Unfavourable Balance is Credit. When an Asset increases we deb...