Your Ask Joey ™ Answer

Impact of Debit and Credit for each Financial Statement Account

To understand double entry accounting, you should understand how a debit or credit impacts each financial statement account (income statement and balance sheet).

You need to ask yourself…

“Does a debit increase or decrease the account?.

.. Does a credit increase or decrease an account? “

The Universal CPA team maintains a list of the impact by account, which can be found in the excel sheet linked below:

You can find a listing of 100+ journal entries that are commonly seen on the CPA exam at this link.

As always, the Universal CPA Review team has your back when it comes to studying for the CPA exam or tackling accounting concepts for your college courses or career!

Back To All Questions

You might also be interested in...

  • CECL Excel Workbook

    If you would like to use the Excel workbook that was used to create the Universal CPA lecture on CECL for debt securities, please click the link below to download the Excel workbook: CECL Calculation workbook (Universal CPA Review)

  • Journal Entry for Direct Materials Variance

    Journal Entry for Direct Materials Variance In the current year, Mission Burrito budgeted 6,000 pounds of production and actually used 4,000 pounds. Material cost was budgeted for $5 per pound and the actual cost was $8 per pound. What would the debit or credit to the direct material efficiency variance account be for the current...

  • Understanding Variance Analysis

    Variance Analysis Variance analysis is a method for companies to compare its actual performance vs its budgeted amount for that cost measurement (related to the flexible budget). The differences between the standard (budgeted) amount of cost and the actual amount that the organization incurs is referred to as a variance. By analyzing variances, the company...