Accounting 101 Part 08 Journal Ledger

[GaryMonro]

An excellent series of videos, well explained and so useful. Thank you for creating and sharing them. One complete beginner's question if I may: does your ADE and LER principle apply to UK accountancy practice too?

[HEIRofTHRONE]

This one SIMPLE UNCOMPLICATED video explained to me in a matter of minutes what my teacher could not in 4 months ...THANK YOU SO MUCH!!!!!

[adelle0001]

thanks much! very useful to my research!

[chandragini]

This is fantastic.............thank you so much

[smokenfly514]

Reminds me of my fundamentals of business class haha, so elementary

[gralvien]

well the wordings on the screen are small and blurry.....

[yunggunna1024]

Honestly, this has been the most helpful accounting 101 lesson ever. After reading the same chapters in my book 1000 times and never getting it, and after just 1 view of each part of these videos I finally get it. Thank you so much enlight09(whatever your real name is =D )

[ToiYeuDatNuocCuaMinh]

Asset increase=debit decrease= credit

Liability increase=credit decrease=debit

equity increase=credit decrease=debit

Revenue increase=credit decrease=debit

Expense increase =debit  decrease = credit

[aznaturalmom]

I can't believe that after reading this stuff and not understanding the textbook - that I finally got it from this set of videos.

[enlight09]

With no other info, entries look right to me.

Most often, these are "accruals". But, in your earlier prepaid phone card example, the asset might be called a "deferral".

Watch out for the specific phrase "accrued expenses" -- it's often used to specify a liability account!

"Accrual" involves activity leading up to a cash transaction; "deferral" involves activity related to a past cash transaction.

[mustafasohail456]

It means that here telephone bill and salary expense is accrued expense ...

[mustafasohail456]

PLs post atleast one example of expense decrease to clearify the concepts ..... thanks for the help

[spaden2112]

@enlight09 this is a good video, but doesn't this guy sound like he is living in his parents basement and trying not to wake them up?

[mustafasohail456]

In My Text Book There Are Questions That Are Troubling Me .... Pls Check My Journalizing Is Correct Or Not

Q1 : Mr Jamil Paid Cash For Telephone Bill

Ans : Telephone Expense (Debit) Cash (Credit)

Here Telephone Bill is accrued expense???

Q2 : Mr Jamil Paid Cash To His Salary Staff

Ans: Salary Expense (Debit) Cash ( Credit)

Here Salary Expense is Accrued Expense???

[mustafasohail456]

For Example We have telephone for office use .... we pay in advance $100 And They Give Us 100 Minutes ...... So Debit "Asset" (Prepaid Expense) & Credit "Asset" (Cash Decrease) ........ Imagine We used 50 Minutes ....... So usage of 50 minutes increases expense and decreases 50 minutes (asset ) ..... My journalizing is correct or not?

[enlight09]

Nice example!

Expense happens when you talk on the phone, not when you pay the bill!

Again, that is true whether you pay the phone company before or after dialing numbers. If you pay before, you are buying an asset; if after, you are reducing a liability.

[mustafasohail456]

thnx for appreciation

[mustafasohail456]

When We Pay Some Expense , So Expense Must Decrese .... For Example "Paid Electric Bill Rs $200" ...... So Expense Must Decrese Why Expense Is Increasing

[enlight09]

Events seem mixed.

Event #1: We turn on lights; that alone causes Expense. We don't pay for electricity at the moment we use it, so we also incur a Liability.

Event #2: We pay Cash. Paying Cash only reduces our Liability.

Imagine we own huge batteries; we charge the batteries only once a year by connecting to the electric companys power. Expense would still happen only when we turn on a light - NOT when we pay for the electricity; it's true whether cash is paid before or after using power.

[sabelilah]

@enlight09 3:35 how is rent increasing if we have paid for it? do i need to know this? or can i just memorize that dividends and expenses always get debited and equity and revenue always get credited?

thank you so much for uploading all this

[mustafasohail456]

a question in my book is troubling me: " Mr Jamil Purchased Stationary For Office Use" ..... According to me the answer should be "Stationary (Asset) Debit Cash(Asset) Credit" But in the book it is written like this "Stationary Expense Debit And Cash Credit" Which one is correct ...

[enlight09]

Both can be correct. In the "real world," the choice is firm-specific. Generally, the more quickly the thing is consumed, the more practical it is to debit Expense.

That is not easy to decode in a textbook problem which creates exactly the question you raise!

Try viewing parts 10 and 11 & you will see that, whether you debit Asset or Expense, it will need to be adjusted anyway.

That is why there is no RIGHT answer to your question. But both ways should lead to the RIGHT financial statements!

[mustafasohail456]

DIDNT UNDERSTAND "the choice is firm-specific. Generally, the more quickly the thing is consumed, the more practical it is to debit Expense."

[mustafasohail456]

i "a)" transaction why owners equity is increasing ..... we have invested 12000 in form of cash ...... so owners equity account must be deducted

[enlight09]

Trust the equations. If assets increase and nothing is borrowed, the equation says equity MUST increase!

Say you have 10 in your wallet. Remove 2 and put them in an empty pocket now, account ONLY for what is in your pocket: It has assets of 2, you own those 2 - the pocket is worth [or has equity of] 2.

Your wallet now contains only 8 - looks as if you have lost 2. But you own BOTH your wallet and your pocket , your total equity is 10!

Wallets and pockets each use separate equations!

[vinsont]

Finally someone that knows how to make this simple. Thanks Dude!!

[exd11183]

geez much easier to retain than reading books again. thnx :)

[LoasthaGhost]

you are awesome Thank You