I have the following problem :
Using T-accounts record the following entries. You will need the following accounts: cash, capital, accounts payable, long term loans, long term assets etc.
Here are 2 snippets with breakdowns :
Manager purchases 4000 food inventory and 3000 beverage inventory on short term credit.
Manager buys kitchen equipment for 40.000 paying 5000 in cash and the rest in long term credit.
What I'm struggling to understand is how do we exactly know if a number/amount is on the debit or credit side? Taking the first column for example. Why the 7000 on the inventory side is on debit and at accounts payable on credit?
Your help would be life saving. Thanks!
Using T-accounts record the following entries. You will need the following accounts: cash, capital, accounts payable, long term loans, long term assets etc.
Here are 2 snippets with breakdowns :
Manager purchases 4000 food inventory and 3000 beverage inventory on short term credit.
Manager buys kitchen equipment for 40.000 paying 5000 in cash and the rest in long term credit.
- Inventory
Accounts Payable - Debit
- Credit
- Debit
- Credit
- 7000
- 7000
- Cash
Long term assets - Debit
- Credit
- Debit
- Credit
- 5000
- 5000
- Long term loans
Long term assets - Debit
- Credit
- Debit
- Credit
- 35000
- 35000
What I'm struggling to understand is how do we exactly know if a number/amount is on the debit or credit side? Taking the first column for example. Why the 7000 on the inventory side is on debit and at accounts payable on credit?
Your help would be life saving. Thanks!