This is the following guide to follow in transactions sheet.
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The accounts that are used to sort and store transactions are found in the company's general ledger. The general ledger is often arranged according to the following seven classifications. (A few examples of the related account titles are shown in parentheses.)
- Assets (Cash, Accounts Receivable, Land, Equipment)
- Liabilities (Loans Payable, Accounts Payable, Bonds Payable)
- Stockholders' equity (Common Stock, Retained Earnings)
- Operating revenues (Sales, Service Fees)
- Operating expenses (Salaries Expense, Rent Expense, Depreciation Expense)
- Non-operating revenues and gains (Investment Income, Gain on Disposal of Truck)
- Non-operating expenses and losses (Interest Expense, Loss on Disposal of Equipment)
Following the above, we'll create the following accounts.
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Cash Accounts
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Accounts Receivable
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Equipment Accounts
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Sales Revenue
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Service Fees
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Rent Expense
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Debit increases assets and credit decreases it.
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Debit increases expense and credit decreases it.
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Debit decreases liability and credit increases it.
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Debit decreases revenue and credit increases it.
- In transaction sheet, we take note of In and Out accounts for double-entry bookkeeping.