Back to the track — Financial Accountant

The first journal entry: debit, credit, and what sits between

An entry is a sentence read by somebody who was not there, so its test is being understood without asking you. Debit and credit are names for two columns, not increase and decrease: the side is derived from the equation, so assets and expenses grow by debit, and liabilities, equity and revenue grow by credit. Balancing is necessary because an entry describes one event from two sides — but it is not proof of correctness, since a reversed entry balances. An entry has six parts: the date, the accounts, the amounts, the reference, the narration and its author. The narration answers why in four facts: the party, the period, the authority and the reason. A compound entry stays one entry while the event is one. And a posted entry is never edited or deleted: it is corrected by a new entry naming the original, dated in the period if it is open and in the current one if it has closed.