Accounts with NB of Dr + on the Dr, - on the Cr

• Assets

• Owner’s Drawings

• Expenses

Accounts with NB of Cr - on the Dr, + on the Cr

• Liabilities

• Owner’s Capital

• Revenues

Definition of Terms

·         Account – a written record of the assets, liabilities, and owner's equity of a business

·         Chart of accounts – a list of accounts used by a business to record its financial transactions

·         Normal balance – the side of an account in the accounting equation

·         Double entry system – an accounting system that involves recording effects of each transaction as debits and credits

·         Account balance – difference between the two sides of an account

·         Footing – adding the amounts

·         Rule / Ruling – represents a mathematical operation [ +, -, x, ÷ ]

·         Double rule / Double ruling – represents account balance and final answers

Types of accounts

·         Permanent account / Real account – account that is brought forward to the next accounting period

·         Temporary account / Nominal account – account that is closed at the end of the accounting period

Permanent accounts / Real accounts

·         Assets

·         Liabilities

·         Owner’s Capital

Temporary accounts / Nominal accounts

·         Revenues

·         Expenses

·         Owner’s Drawing