It is not possible for the left side of the equation to both increase/decrease as a result of the same transaction
Please give an example in validation of the above statement.
2007-07-17 23:29:42 · 3 answers · asked by happy 2 in Business & Finance ➔ Other - Business & Finance
It IS possible for the left side of the equation to both increase/decrease as a result of the same transaction.
A = L + E
When you make payment for inventory, or stocks of office supplies, or prepaid insurance, you'd:
Dr Inventory (increase asset)
Cr Cash (decrease asset)
or
Dr Office supplies (increase asset)
Cr Cash (decrease asset)
or
Dr Prepaid insurance (increase asset)
Cr Cash (decrease asset)
In all 3 examples, the right side of the equation is untouched.
2007-07-18 02:42:33 · answer #1 · answered by Sandy 7 · 0⤊ 0⤋
Yes - it is true.
It is NOT possile for the left side of the equation to both increase and decrease at one time.
For any transaction, the account to be balanced, there should be a Debit and a credit.
The logic is simple. It is like this. When somebody gains, then somebody else HAS to lose.
When there is an addition in an account, there HAS to be a deduction in another account. It is as simple as that.
2007-07-17 23:52:21 · answer #2 · answered by Sijus 2 · 0⤊ 0⤋
yes it is possable however one of the transactions must be a reverse(-)
2007-07-17 23:39:04 · answer #3 · answered by Rob C 1 · 0⤊ 0⤋