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Jonathan Dorn CPA, licensed CPA in the state of Florida
this is basic accounting tips part 2 let's get this shit in
if you missed part one go to the homepage CPA Strength and watch that one
first because this one Won't make as much sense
so anyways now i'm going do to this in all my, basic accounting tips from now on we're
going to go
D C Debit / Credit ADE LER
now i'm a CPA and I still do this, you can do this in the
first day of accounting class DC/ADE/LER Debit/Credit Asset Draw Expense
Liabilities Equity Revenue DC/ADE/LER
alright so now every time you do a journal entry
you are going to have at least one Debit and at least one Credit every time you
input something into the books your gonna have at least one Debit at least one
Credit, you might have 20 Debits a lot of times you'll have 20 or 30 Expenses and
money coming out of the bank over here so you might have twenty-twenty Debits
one Credit and no matter how many different entries you have on each side
it's always always going to be equal
always always always always always equals a lot of accounting
software won't let you leave the page or whatever if the Debits don't equal the
Credits, so that's a that's a steadfast rule take that one to the bank
TELL YOUR MAMA, it's always going to happen so
now you're just gonna have to remember that Debit is always on the left
always always always, Credit is always on the right, now
one is not good / one is not bad
see I i got confused for, i'll be honest about two years of my accounting career
because I thought Debit
I was confused because, I thought Asset is good right ???
right, so I thought okay Debit is good but then Revenues is good money is good
incoming money's good and so I thought Credit is good so you know that's totally
wrong
the way to think about this is you know neither good or bad just is
neither good or bad
ok now, these are these are positive
these are these are positive sides so if you have if you have a positive asset if
you have money coming in
that's a Debit if you have a negative Asset
it's a credit so these are all positive sides
positive positive positive you'll you'll see where that comes in later because
you can have an Asset if there is an asset leaving if there's money leaving
it will be
it will be a Credit so anyways so these are positive sides DC/ADE/LER
all right now you might ask what is you know what
where are these?? i'll keep it i'll just try to keep it simple and brief for now
now the most most common most common Asset is
the most common Asset is cash okay but you can also but you also have accounts
receivable, inventory, equipment, equipment, buildings
so that's Assets but let's focus on cash cash is the most common in a lot of
entries especially in the beginning you know in the beginning you want to know
what to do with cash i'll help you so those the Assets. a Draw is when, say
when an owner
this can also be owner's Equity you might see this
owner's Equity but anyways when the owner cuts the check to
himself
it's a Draw or if it's or if it's a business and it might be a out
if it's a corporation
it could be a Distribution or Dividend so and it's almost the other side of
Equity so DISTRA
BUTION is the Draw. Expenses uh you know something you spend in the hopes of
making some money for your for your business or whatnot we will say
rent utilities
you know, and such and such and such telephone, internet, telly , internet
alright so now these are all positive positive Debits: ADE DC/ADE
now let's go with LER Liabilities
these are going to be accounts payable
what do you owe somebody wages payable now almost every Liability is a Payable
except unearned Revenue, so if you see a payable
it's a Liability so the owner's Equity
you're not really going to mess with it too much, it's mostly the retained
just say it's retained earnings
you know what is have it at retained earnings
we'll get into that later, but for now just the owner's Equity
that's how much you have in the business
you know the owner's Equity, the equity, what you have in the business and
also Revenue
so that's, you make a sale you, do service
that's going to be Revenue, so sales
service
you guys love my handwriting, that's a lefty strength, I think it's August
Thirteenth today, it's lefty day, so any of you lefty's out there
we are the only ones in our right mind
I suck, anyways, so let's get back to this so that's DC/ADE/LER
so you know kind of what they are all now we're going to do some journal
entries in the next in the next video
I just want you to know watching this one that, Expenses and Revenue
that's the Income Statement here this is what's on the Income Statement
now when, when you file your taxes at the end of the year
you pretty much going to give your CPA your Income Statement and you're going
to give them the Balance Sheet on the Balance Sheets the biggest the biggest
thing that's right
you might have heard of it a lot you know Balance Sheet carries over you from
year to year and the Balance Sheet is the Basic Accounting Equation which is
Assets = Liabilities + Equity and what we'll go over that of
course later it's going to show you that the DC/ADE/LER
it just works because you have your Income Statement right here and then you
also have your Balance Sheet see Assets equals Liabilities plus Equity so
there's your Balance Sheet and that the Draw is basically the other side of that
what are you so it can kind of be included in there anyways that's that's
part 2
and I'm obviously not a teacher
I just I struggled for years actually had an accounting degree didn't really
have a full grasp of this i freakin struggled and I learned this
I learned DC/ADE/LER and once i started writing this down every time
and referring to allows to in journal entries and problems
I it just the light bulb went off side
I just I feel like I need to share people to people who struggle
you don't need T - accounts with this this this is kind of a t-account this is
all you'll ever need
DC/ADE/LER really. Anyways you if you Liked the video. Give a thumbs up. Give me
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I'm going to have a whole bunch of stuff CPA Strength
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strongest CPA in America. and I'm hella addicted to working out, so deuces