welcome to the course that has been designed to help you understand and
apply
the concept of debits and credits in accounting
in this section will cover the course and teacher background
why it is important to understand
debits and credits in accounting where debits and credits
fit into the accounting system and then we'll give you
a course outline trying to understand
the debit and credit concept in accounting is near impossible
when you are first introduced to it
most people don't find the math of accounting as difficult
as understanding the concepts of accounting and for many
there is no more difficult a concept to understand that of
debits and credits debit and credit is basically
a set of rules that you must follow when recording financial transactions
in the accounting system now some people are very comfortable
to simply learn the rules of accounting and then apply them
others want to fully understand the accounting concepts
so that they can apply them in a more meaningful way
if you are in the latter group then this course is for you
ultimately learning the rules and debits and credits
is something that everyone involved in accounting must learn
but if you don't also learn the reasons behind creating these rules
then there's very little educational value so this course is primary target
at students who have a desire to learn how best to
fully understand and then apply the concepts of debits
and credit and accounting I will assume in this course that you already have
limited understanding of accounting but that you need to do this course so that
you can progress
in your work or learning of accounting to fully understanding the concepts an understanding
and application of debits and credits will help you achieve these outcomes
so in this course I will deliver training
on the concept of debits and credits from an accounting students point of
view
I've been involved with applying and teaching accounting concepts for many
years
which started initially with my university studies
but for over 25 years I have applied the concepts of accounting
when keeping the books for my many businesses that I have operated
in the past five years or so I've taught accounting to students
in government technical colleges in Australia recently
I authored the book frequently asked questions basic accounting concepts
which is available from the link provided why is it important to
understand everything credits
well without an understanding of debits and credits
you won't be able to accurately record financial transactions
in the double-entry bookkeeping system the double-entry bookkeeping system
is a key component up accounting
and is used all over the world to report
on the financial position and performance for businesses
the reports produced by the double-entry bookkeeping system
help stakeholders in a business like
owners manages and funders
to make informed decisions about the resources
and the direction of their businesses so a lack of understanding
in debits and credits could lead to in incorrect recording
of financial transactions which leads
to inaccurate reporting on the financial status for business
which then leads to poor decisions being made about
the allocation of these financial resources which could ultimately lead to the
loss
of resources or much worse where does debits and credits
fit into the counting system debits and credits is a classification
method used to record financial transactions
in the double-entry bookkeeping system this
classification method is applied when financial transactions take place
and a source document is created the debits and credits classification method
allows the financial information contained
in the source document to be recorded in the books of the business
starting with what is known in accounting as the journal
initially we will look into the history of debits and credits
to give you some important background information
then we will fully explore the other accounting concepts
that underpin debits and credits in accounting
Armed with this knowledge we will be able to look at how debits and credits
are applied in accounting which we will then follow with explanations on some
work examples
so let's get started
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