FABM

• Expenses: Decrease

  Credit
• Liabilities: Increase

  Credit
• Assets: Increase

  Debit
• Cash on hand

  Debit
• Prepaid expense

  Debit
• Cairo, Drawings

  Debit
• Mortgage payable

  Credit
• Accounts receivable

  Debit
• Accounts payable

  Credit
• Cash on hand

  Debit
• Increase in Assets

  Debit
• Increase in expenses

  Debit
• Increase in income

  CREDIT
• Decrease in Liabilities

  Debit
• Decrease in Inventory

  Credit
• Decrease in account receivable

  Credit
• Increase in Capital

  Credit
• It is the Latin words of "Debit and Credit"


  Debere and Credere
• • It is positioned to the left side
  • Record all the Value received

  Debit
• • Positioned on the right side
  • Record all the expenses or Parted with

  Credit
• Increase also called as

  Normal Balance
• Steps or procedures used to record transactions

  Account Cycle
• 4 Steps of Account Cycle

  • Identify and Analyze Business Transaction
  • Journalizing
  • Posting
  • Preliminary Trial Balance
• Our business transactions and other business transactions

  External Events
• No involvement of external business

  Our business transactions only

  Internal Events
• Transactions are normally identified as

  SOURCE DOCUMENTS