Thursday, December 8, 2011

Why do Expenses have a balance of debit and why do Revenues and Capital have a balance of credit?

I am studying accounting and can't understand that.


I understand that assets have a balance of debit, but why expenses?


I understand that Liabilites have a normal balance of credit, but why Revenue and Capital?|||Assets = liabilties + equity.





if you have $1000 cash and you owe $300 to a friend your equity is $700





Assets = liabilities + equity


$1000 = $300 + $700








make sense?

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