Click on the “ New Journal Entry” option to enter the transaction: Next up, you will get the journal book interface. To enter the above accounting transaction, navigate to the WP Admin Dashboard > WP ERP > Accounting > Journal Entries. We assume that you already have WP ERP Accounting up and running on your Website. If you are using WP ERP accounting module, you can easily enter the above transaction into the system. How to Input Journal Accounts in WP ERP Accounting Module? But you must enter the transaction when you take a personal loan from your business. You can not enter any private financial transaction or any transaction that does not change the financial condition of your business.įor example, you can not enter the transaction when you take a personal loan from your bank account. You write a check to pay for $318 of office supplies.You write a check for $5000 to pay for an Asset of your business.Of this amount, $500 is applied to the principal, and $40 is applied to the loan interest. You pay $540, via check, on the $10,000 loan acquired in Example 2.Your bank charges $10 for the monthly statement.You borrow $10,000 from the Standard Chartered bank for his/her business.Suppose you invest $1000 in cash and $2000 at the bank for his/her business.Here are some sample financial transactions: If you are yet to grasp the fundamentals of debit and credit. Now, if you add this transaction to the Journal entries, the transaction will be like- DateĬheck out a Few Examples of Journal Entries And the cash account (asset) will be credited. Here, the furniture account (asset) will be debited as it is increased. The first change is that you are increasing your business asset by that furniture($100) and the other change is that you are decreasing your business asset with cash ($100) to buy the furniture. Say, for example, if you buy furniture for your office at $100, you are making two changes in the financial condition. If an account belongs to the asset type and if it is increased then you must make it debit in your accounting book. Account TypesĮquities(Owner’s Equity, Owner’s Capital) The sum of Debit accounts and the sum of Credit accounts are always equal, although they are totally opposite in nature. Equities: Equity is the amount of ownership of a business owner to his business.Revenues: Revenues are the amounts earned from the cost of goods sold or the services that a business provides to its customers.Examples of accounting expenses are the cost of goods sold, commissions, salaries, wages, insurance expenses, depreciation, bank charges, etc. Expenses: Expenses are any amount of money that is spent on with a view to generating revenues.Examples of liabilities include loans, accounts payable, mortgages, deferred revenues, accrued expenses and more. Which means you owe something to somebody else. Liabilities: Liabilities are the legal and financial obligations to somebody else.Examples of asset accounts are cash, account receivables, investments, inventory, supplies, land and so on. Assets: Assets are any resource that has a future economic value or that can be converted into cash.Here are the most common accounting types or debits and credits chart: In modern accounting, you will have to know the basic accounts. You will record these transactions in two accounts: a debit and credit account. You must record business transactions in your small business accounting books. Business transactions take place regularly.
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