Recording Transactions

The Grammar of Commerce

Every journal entry answers three questions: what happened, which accounts move, and by how much. Master ten patterns and you can record a hundred business events.

Accrual Principle: $\text{Record when earned or incurred, not when cash moves.}$ Cash-basis waits for the bank; accrual-basis tells what really happened.

Transactions & Depreciation

Continuing our core patterns, expenses and equity entries follow the exact same logic of balanced debits and credits.

Depreciation: Dr Depreciation Expense, Cr Accumulated Depreciation. No cash moves; it allocates an asset's cost over its useful life, reducing book value and profit.