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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