Lending and borrowing relationship in accounting

In general, the opening balance of an asset account is on the debit side, with the debit side indicating an increase and the credit side indicating a decrease. Except for allowance and additional items, such as bad debt reserve, inventory depreciation reserve, fixed assets impairment reserve and other assets impairment reserve, because it is allowance, the opening balance is in the credit, and the credit indicates increase and the debit indicates decrease.

Another example is the difference between the purchase and sale of goods and the cost of materials. This allowance is an additional subject, which needs to be set according to the economic nature of the enterprise. It may increase debits and decrease credits, and vice versa.

Liabilities and owners' equity are opening balances at the lender, with the lender indicating an increase and the debit indicating a decrease. Income is similar to liabilities, with the lender indicating an increase and the borrower indicating a decrease, but there is no opening amount.

Costs are similar to assets. Debit means increase, credit means decrease, and there is no opening amount. Profit is revenue-cost.

Current Balance = Opening Balance+Current Increase-Current Decrease.

For assets, it is opening debit balance+current debit amount-current credit amount = ending balance. If it is a positive number, it is a debit; If it's negative, it's credit.

Liabilities are opening credit balance+current credit amount-current debit amount = ending balance. If it is positive, it is credit; If it is negative, it is a debit.

It is cumulative amortization and a kind of asset allowance account. Accumulated depreciation of investment real estate is the same as accumulated depreciation, with the lender indicating an increase and the debit indicating a decrease.

Extended data:

The debit and credit bookkeeping method refers to a double-entry bookkeeping method with accounting equation as the bookkeeping principle and borrowing as the bookkeeping symbol, which reflects the increase and decrease of economic business. With the development of commodity economy, debit and credit bookkeeping method has been widely used. The object of bookkeeping is no longer limited to the relationship between creditor's rights and debts, but expanded to record the increase and decrease of property and materials and calculate operating profits and losses.

The words such as "borrowing" and "lending", which were originally limited to recording creditor's rights and debts, can no longer summarize all the contents of economic activities. The content it represents should include the ins and outs of all changes in the capital movement in economic activities. They gradually lost their original literal meaning and became a simple bookkeeping symbol, which only indicated the direction of bookkeeping and became a specialized accounting term.

Under the debit and credit bookkeeping method, the structure of all accounts is left-borrowing and right-lending, but the nature of lending reflecting the changes of accounting elements is not fixed. For different accounts, the contents registered by both borrowers and borrowers are different.

Sub-ledger, also known as sub-ledger, is an account book opened according to sub-ledger account, which is used to register the details of a certain kind of economic business and provide detailed accounting data. General ledger and subsidiary ledger, collectively referred to as ledger, are account books for classified accounting and supervision of economic business according to accounts.

References:

Debit bookkeeping method _ Baidu Encyclopedia