#journal-entries
Master journal entry creation and accounting transactions
Purchase price variance is (actual price minus standard price) times quantity purchased: positive means you overpaid, negative means you beat the budget.
A credit memo shrinks what a customer owes and a debit memo grows it — both adjust accounts receivable without rewriting the invoice.
Adjusting entries record what timing left out; correcting entries fix prior errors. Reverse only accruals — reversing a correction resurrects the error.
An encumbrance reserves budget when a purchase order is issued, before any invoice arrives — the entry, liquidation, and year-end treatment explained.
Assets, expenses, and dividends grow with debits; liabilities, equity, and revenue with credits — which side of the ledger each account increases on.
Your head-lease liability stays while the sublease adds a second set of books — classify by the underlying asset, present gross, test for impairment.
A T-account puts debits on the left and credits on the right of one ledger account — sketch one to check any journal entry before you post it.
The gross method books purchases at full invoice price; the net method books them minus the discount and flags misses as Purchase Discounts Lost expense.
Assets and expenses increase with debits; liabilities, equity, and revenue increase with credits — the accounting equation sets every account's normal side.
Single-entry tracks cash; double-entry tracks your whole business. Each transaction hits two accounts, keeping Assets = Liabilities + Equity balanced.
Debits grow assets and expenses; credits grow liabilities, equity, and revenue. Learn the five rules plus a 6-step hunt for trial-balance errors.
Meet any one of five ASC 842 tests and your lease is finance, not operating — a choice that front-loads expense and reshapes leverage ratios.
