Financial Accounting Course

U.S. GAAP Codification Accounting Topics

Double Entry Recording 01
Debits and Credits

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Double Entry Recording 01

1. All accounting transactions are recorded
--> using "Double Entry" recording system

2. Double Entry Recording System
--> at least one "Debit" entry
--> at least one "Credit" entry

3. An example of double entry recording
Transaction --> purchased merchandise and paid $3,200 in cash
(1) One entry on debit --> merchandise 3,200
(2) One entry on credit --> cash 3,200










4. The sum of all debit entries = The sum of all credit entries
If the sums of debit and credit entries are not equal for any journal entry
--> the journal entry is not correct

5. Debit and credit sides of the accounting equation
Left side of the accounting equation = debit = assets
Right side of the accounting equation = credit = liabilities and equity

Assets = Liabilities + Equity

6. Debit side entries
(1) Increase in assets
(2) Decrease in liabilities
(3) Decrease in equity

7. Credit side entries
(1) Decrease in assets
(2) Increase in liabilities
(3) Increase in equity

8. Combined version of accounting equation
Assets = Liabilities + Beginning equity + Revenue - Expenses

9. Debit side entries
(1) Increase in assets
(2) Decrease in liabilities
(3) Decrease in equity
(4) Decrease in revenue
(5) Increase in expenses

10. Credit side entries
(1) Decrease in assets
(2) Increase in liabilities
(3) Increase in equity
(4) Increase in revenue
(5) Decrease in expenses

11. Normal Balances
(1) Asset accounts have normal balances on debit side
(2) Liability accounts have normal balances on credit side
(3) Equity accounts have normal balances on credit side
(4) Revenue accounts have normal balances on credit side
(5) Expense accounts have normal balances on debit side

Practice Questions: Is it debit or credit?

decrease in expenses



increase in expenses


increase in revenue



decrease in revenue






increase in liabilities



decrease in liabilities



decrease in equity



increase in equity






normal balances of equity accounts



normal balances of asset accounts



normal balances of liability accounts






normal balances of expense accounts



normal balances of revenue accounts






decrease in cash account



increase in inventory account



increase in borrowings






decrease in preferred stock



increase in cost of goods sold



decrease in accounts receivable



increase in bonds payable




Codification Topics at the 100 Level 
Topic 105: Generally Accepted Accounting Principles

Codification Topics at the 200 Level 
Topic 205: Presentation of Financial Statements
Topic 210: Balance Sheet
Topic 215: Statement of Shareholder Equity
Topic 220: Comprehensive Income
Topic 225: Income Statement
Topic 230: Statement of Cash Flows
Topic 235: Notes to Financial Statements
Topic 250: Accounting Changes and Error Corrections
Topic 255: Changing Prices
Topic 260: Earnings per Share
Topic 270: Interim Reporting
Topic 272: Limited Liability Entities
Topic 274: Personal Financial Statements
Topic 275: Risks and Uncertainties
Topic 280: Segment Reporting

Codification Topics at the 300 Level 
Topic 305: Cash and Cash Equivalents
Topic 310: Receivables
Topic 320: Investments-Debt and Equity Securities
Topic 320-10-35: Transfers of Securities: Between Categories
Topic 323: Investments-Equity Method and Joint Ventures
Topic 325: Investments-Other
Topic 330: Inventory
Topic 340: Other Assets and Deferred Costs
Topic 350: Intangibles-Goodwill and Other
Topic 360: Property, Plant, and Equipment

Codification Topics at the 400 Level 
Topic 405: Liabilities
Topic 410: Asset Retirement and Environmental Obligations
Topic 420: Exit or Disposal Cost Obligations
Topic 430: Deferred Revenue
Topic 440: Commitments
Topic 450: Contingencies
Topic 460: Guarantees
Topic 470: Debt
Topic 480: Distinguishing Liabilities from Equity

U.S. GAAP Codification of Accounting Standards
Accounting Standards Codification, ASC, Overview
ASC Codification 100: General Principles
ASC Codification 200: Presentation
ASC Codification 300: Assets
ASC Codification 400: Liabilities
ASC Codification 500: Equity
ASC Codification 600: Revenue
ASC Codification 700: Expenses
ASC Codification 800: Broad Transactions
ASC Codification 900: Industry

U.S. GAAP by Codification Topic 
 105  GAAP Hierarchy 
 105  GAAP History 

 205  Presentation of Financial Statements 
 205-20 Discontinued Operations 
 210  Balance Sheet 
 210-20 Offsetting 
 220  Comprehensive Income 
 225  Income Statement 
 225-20 Extraordinary and Unusual Items 
 230  Statement of Cash Flows 
 250  Accounting Changes and Error Corrections 
 260  Earnings per Share 
 270  Interim Reporting
 310  Impairment of a Loan
 320  Investment Securities 
 320  Other-Than-Temporary Impairments, FSP FAS 115-2 
 320-10-05 Overview of Investments in Other Entities 
 320-10-35 Reclassification of Investments in Securities
 323-10 Equity Method Investments
 323-30 Investments in Partnerships and Joint Ventures 
 325-20 Cost Method Investments 
 330  Inventory

 340-20 Capitalized Advertising Costs 
 350-20 Goodwill 
 350-30 Intangibles Other than Goodwill 
 350-40 Internal-Use Software 
 350-50 Website Development Costs 
 360  Property, Plant and Equipment
 360-20 Real Estate Sales 
 410  Asset Retirement and Environmental Obligations 
 420  Exit or Disposal Cost Obligations 
 450  Contingencies 
 450-20 Loss Contingencies 
 450-30 Gain Contingencies
 480  Redeemable Financial Instruments 

 505-20 Stock Dividends, Stock Splits 
 505-30 Treasury Stock 

 605  SEC Staff Accounting Bulletin, Topic 13 
 605-25 Revenue Recognition - Multiple Element Arrangements 
 715-30 Defined Benefit Plans - Pension
 718  Share-Based Payment 
 730  Research and Development 
 730-20 Research and Development Arrangements 

 805  Business Combinations  
 810  Consolidation 
 810  Noncontrolling Interests 
 810  Consolidation of Variable Interest Entities, SFAS 167 
 815  Derivatives and Hedging Overview 

 820  Fair Value Measurements  
 820  Fair value when the markets are not active, FSP FAS 157-4
 825  Fair Value Option 

 830  Foreign Currency Matters 
 830-20 Foreign Currency Transactions 
 830-30 Translation of Financial Statements 
 835  Interest 
 835-20 Capitalization of Interest 
 835-30 Imputation of Interest 

 840  Leases 
 840-20 Operating Leases 
 840-30 Capital Leases 
 840-40 Sale-Leaseback Transactions
 845  Nonmonetary Transactions 

 855  Subsequent Events 
 860-20 Sale of Financial Assets, SFAS 166 
 860-50 Servicing Assets and Liabilities, SFAS 156 

 985-20 Costs of software to be sold  

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