yo yo yo CPA strength here back with
another video my best video ever well we
got we got lightning now I want to say
say this is one take Timmy babe we just
going okay we don't even care we're just
trying to get the information out in a
timely manner we're trying to help we're
trying to have fun I love all the
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this is accounting for beginners number
96 I have a whole playlist not 96 videos
right here best accounting playlist in
the world just check this out
it's got my DC a blur it's kind of what
I'm known for it's helped thousands upon
thousands upon thousands of accounting
students around the world and ain't
gonna change let's just say assets equal
liabilities plus equity that's the basic
accounting equation and that's always
gonna happen assets what do you have in
the business which we have cash from a
thousand dollars that equals the
liabilities plus equity liabilities is
who who you would owe it to and the
equity is who owns like owner's equity
who owns who owns the assets does the
company own the assets or do you owe
someone but that's not the this isn't
the let's just say it's assets a
thousand equals retained earnings of a
thousand that's under equity and so be
like it
this could be like a general a general
ledger or a general journal so after
that let's say you withdraw $500 cash
for personal use the question I got was
how does this balance in the base
account
basic accounting equation and this is
also the balance sheet the basic
accounting equation is also the balance
sheet well let's make a journal entry
from this withdraw $500 cash what is
cash cash is an asset let's go to DC a
blur
mmm asset in the positive if it's going
so an asset if it was going up we would
debit it now I go through DC a blur I go
all through it in different videos so if
you're if you're new here please check
this out this is the key really to mmm
financial accounting tight you do all
your journal entries and the journal
entries is what does everything else so
but you don't have you don't have an
asset increasing you have an asset
decreasing withdraw 500 cash right if
you have if you have a thousand dollars
and you're in your hand a thousand
dollars and you give away five withdraw
five for your bank account then you're
gonna have five seven and decrease in
them out so if you have cash and a
decreasing amount it is going to be a
credit it would be increasing debit if
it was decreasing and be a credit the
cash so we're gonna write this over here
we're just gonna put a line here
Devin credit cash five hundred that's
gonna be our credit now we know that
debits have to equal credits we we with
draw five hundred dollars for personal
use so that would be a drop a width drop
for personal use that's what with that's
what a withdraw is it lessens
woodie's it's for personal use it's not
a business expense and you're taking out
of the money you're taking out you're
taking out money of a business for your
own use so it lessens the owner's equity
it lessens what you have in the business
does that make sense like I just want
you know if you're starting out new in
the accounting you're gonna be going
really fast like oh like I don't
understand anything and if you keep
going like that you're never gonna know
anything if you just slow down
that's what work for me I know in the
beginning the problems will take longer
but you will know the basics fronting
back and that's really what you need to
know in accounting so just just try to
slow down and think about what's
happening now give it some big number
just you know try to make it small like
a thousand and five hundred is
manageable in your head but anyway so
withdraw $500 for cash the personal use
now that's gonna be a draw $500 so
there's our debit there's our credit and
that's our journal entry for this
transaction right here now let's put
this in the general ledger the balance
sheet or whatever this is right here the
basic accounting equation let's do that
so you know if cash is a credit of $500
then you know it is in the is decreasing
decreasing $500 which would equal cash
of $500 that's our assets
$500 cash equals
and now we have what are we going to
whatever unit where does this draw of
500 dollars go withdraw 500 dollars well
a draw that's why DC a blur is good in
and that's why I like it in this fashion
because draw is a cross from equity so
if you think about it equity owner's
equity what the owner has in the
business it's his I'm taking on withdraw
for personal reasons you're reducing the
equity and that's exactly where it would
go it would go under the equity section
of your assets you would have a draw of
$500 and that would be a negative
you'd be reducing it because that's what
that's what a $500 draw reduces retained
earnings so you'll be left with five
hundred dollars of equity of five
hundred dollars of equity you'd have a
thousand thousand retained earnings -
500 draws five hundred dollars of equity
$500 assets equals zero liability plus
five hundred equity and you know
everything I said here might not have
been perfect and I do try my best
accounting is just a lot a lot a lot of
practice a lot of practice and the good
thing is there's rules and the rules
don't really change in the basic
accounting but anyways this is CPA
strength and I'm out of here for this
one I'll see you later
deuces