Write the entry and see what it does

Write a two- or three-line entry, and see whether the ledger accepts it, and what it did to profit and to the equation.

Line 1 — accountLine 1 — sideLine 1 — amountSARLine 2 — accountLine 2 — sideLine 2 — amountSARLine 3 — accountLine 3 — sideLine 3 — amountSAR

Result

Total debits: 23000.00
Total credits: 23000.00
Difference: 0.00
Revenue in this entry: 20000.00
Expenses in this entry: 0.00
Its effect on profit: 20000.00
Assets: 23000.00
Liabilities and equity: 23000.00
The equation holds: 1

The ledger accepts this entry

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The method

The ledger totals the debits, totals the credits and compares them. An unbalanced entry is refused at entry rather than accepted and fixed later — the first thing that separates a ledger from a spreadsheet.
From the same lines it then derives: the trial balance, the entry's effect on profit (revenue less expenses), and the equation (assets = liabilities + equity + the period's result).
Balancing is not proof of correctness: an entry with its sides reversed balances perfectly. Read the profit line and the equation line, not the difference alone.

Built forAn accountant reviewing an entry or balance before close

When you need it

You have connected figures that need testing before they enter the close file. Write a two- or three-line entry, and see whether the ledger accepts it, and what it did to profit and to the equation.

The decision it supports

Use the result to decide whether the work can be accepted or a difference or classification needs tracing. The tool shows its method beside the result so you can review it.

What you receive