5. Transactions

• economic events that require recording in the financial statements

• Assets, liab, se items change as a result

Each transaction affects at least two accounts

Assets = liab + se

is a device or convention for organizing and accumulating the accounting entries of transactions that affect an individual account

Debit = left

Credit = right

Assets increase = dr

Liab, SE increase = cr

Ending and beginning balance on the same side as the increase

uses a standardized format to indicate the accounts and amounts affected by each transaction

Double entries reflects equal debits and credits