3. General Debit and Credit Entries

Entry to record when owner invests cash in the business (sole proprietorship / partnership)

Debit Cash, Credit Owner's Capital account (For example. John Smith, Capital)

Entry to record when owner invests cash in the business (Corporation)

Debit Cash, Credit Capital Stock / Common Stock

- If the investor pays more than the stock's par value, you would also credit Paid-In Capital in Excess of Par.

Record issuance of common stock

Debit Cash, Credit Common Stock

Record the borrowing of cash and signing of notes payable

Debit Cash, Credit Notes Payable

Record the month's cash sales and the cost of those sales

Requires two entries.
- The first entry is a debit to Cash and credit Sales revenue for the amount sold for.
- The second entry is a debit to Cost of goods sold for how much the item cost to produce/buy for the seller and credit Inventory for the same amount.

Entry to record when the owner withdraws cash from the business

Debit the Drawing account (such as Chris Clark, Drawing) for the amount withdrawn, Credit Cash for the amount withdrawn.

Record the collection of cash on account (receiving cash from credit customers)

Debit Cash, Credit Accounts Receivable