Accounting Essay Example

Accounting Essay Example Accounting Essay – Coursework Example Topic:Â   Accounting Essay The rules of debit and credit as applied to various accounts in financial accounting are specific. Each transaction in a particular account is recorded twice according to financial accounting rules. The different accounts in financial accounting are assets account, liabilities accounts, owner’s equity account, revenues account and expense account. In financial accounting, the debit and credit are positioned on the left and ride side of the financial statement. In case of assets accounts an increase in asset is recorded on the left hand side whereas the decrease in asset comes on right side. For example a purchase of machinery is recorded on left and sale of machinery is shown on rights hand side of financial statement. In the case of liabilities accounts an increase in liability will be posted on credit side and decrease is recorded on debit side. if an organization has accounts payable then it will be recorded on the credit side while accounts rece ivables recorded on the debit side .Owner’s equity account is a owner’s capital account where the increase and decrease in the owner’s profitability is projected. Here a purchase of asset will be posted on debit side whereas sale of asset comes on credit side. In case of revenue account an increase in asset is debited while decrease in asset is credited. In expense account the salary paid to employees will be credited and interest received will be debited. So every transaction is balanced out by recording them on the debit and credit side of an account.