Journal Entries: Basic Definitions

     A record of increases and decreases in specific asset, liability, or owner's equity items.

The left side of an account (Dr).

     The right side of an account (Cr).

An account balance on the side where an increase in the account is recorded.

     An accounting record in which transactions are initially recorded in chronological order (day-by-day).

     A system that records in appropriate accounts the dual effect of each transaction. The Equality of Debits and Credits; each financial transaction has Debit and Credit party. Debit must be equal to Credit.

A journal entry that involves only two accounts.

     A journal entry that involves three or more accounts.

     The entire group of accounts maintained by a company.

     provides the balance in each of the accounts as well as keeps track of changes in these balances.