Accounting is about numbers and since accounts need to balance out, the numbers need to match. How do they much in accounting though?<\/p>\n
As you know, accounting is about debits and credits and hence it\u2019s called double entry accounting. You cannot make a debit entry without a credit to support it and vice a versa. As such, both sides, debits and credits need to equal out.<\/p>\n
When you think about it, just to give you a simple example, you\u2019re buying goods and paying for them. Is it possible that you\u2019re paying more than they are worth? No. So in your accounts you take up a liability in the same amount you\u2019re accounting for inventory. That\u2019s debit say 1,000 and credit 1,000.<\/p>\n
Another good thing about debits and credits having to equal is the hints they give you. Trust me, putting those debits or credits or both down on paper gives you a visual of what you\u2019re missing \u2013 is it another debit or a credit. And it\u2019s not just what you\u2019re missing but how to make the entry work properly. Does it all make sense? Maybe an item should actually be on debit side instead of credit where you initially put it. In essence, double entry accounting is also a tool.<\/p>\n","protected":false},"excerpt":{"rendered":"
Accounting is about numbers and since accounts need to balance out, the numbers need to match. How do they much in accounting though? As you know, accounting is about debits and credits and hence it\u2019s called double entry accounting. You cannot make a debit entry without a credit to support it and vice a versa. […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[26,74],"tags":[],"class_list":["post-4555","post","type-post","status-publish","format-standard","hentry","category-2-processes","category-2-7-accounting-in-itself"],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/posts\/4555","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/comments?post=4555"}],"version-history":[{"count":1,"href":"https:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/posts\/4555\/revisions"}],"predecessor-version":[{"id":4556,"href":"https:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/posts\/4555\/revisions\/4556"}],"wp:attachment":[{"href":"https:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/media?parent=4555"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/categories?post=4555"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.officetodo.com\/public\/wp-json\/wp\/v2\/tags?post=4555"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}