Introduction

You've come a long way in your journey to learn accounting! This is perhaps the most important unit in this entire course because you are learning the fundamentals upon which the entire accounting process is based. If you still do not understand the meaning of the words debit and credit, please go back to the previous lesson and review.

If you are ready to practice more with Debits and Credits, let’s begin.

block letters spelling out credits debits with arrows pointing in opposite directions
© iStock

 

Lesson Objectives

Following successful completion of this lesson, students will be able to...

  • Analyze the accounting equation for the purpose of relating it to the accounting cycle.

Essential Questions

  • Am I understanding Debits and Credits?
  • Do I know the normal balance of accounts?
  • Am I ready to record business transactions?

Enduring Understandings

  • Knowing how to apply Debits and Credits to individual accounts to record a business transaction is part of the accounting cycle.
  • It is important to understand the normal balance of accounts.

The above objectives correspond with the Alabama Course of Study: Accounting standards: 5.