Fundamentals of Financial Accounting

📋 Course Outline

1. Normal account balance
2. Expanded accounting equation
3. Credit balance criteria
4. Overdrawn bank balance
5. Cash account transactions
6. Trial balance credits
7. Supplies account management
8. Accounts receivable balance
9. Journal entry format
10. Impact of service billing
11. Journal recording rules

📖 1. Normal account balance

🔑 Key Concepts & Definitions

• Normal Balance: The side (debit or credit) of an account that increases its balance.
• Asset Accounts: Typically have a debit normal balance; increases are recorded on the debit side.
• Liability and Equity Accounts: Usually have a credit normal balance; increases are recorded on the credit side.
• Revenue Accounts: Increase with credits; thus, their normal balance is a credit.
• Expense Accounts: Increase with debits; their normal balance is a debit.
• Overdrawn Bank Balance: When withdrawals exceed deposits, the cash account shows a credit balance, indicating a negative cash position.