Читать книгу Reading Financial Reports For Dummies - Lita Epstein - Страница 77

If you're a sales manager tracking how your department is doing for the year, you want to be able to decipher debits and credits. If you think you've found an error, your ability to read reports and understand the impact of debits and credits is critical. For example, anytime you think the income statement doesn't accurately reflect your department's success, you have to dig into the debits and credits to be sure your sales are being booked correctly. You also need to be aware of the other accounts — especially revenue and expense accounts — that are used to book transactions that impact your department.

A common entry that impacts both the balance sheet and the income statement is one that keeps track of the amount of cash customers pay to buy the company's product. If the customers pay $100, here's how the entry looks:

Account	Debit	Credit
Cash	$100
Sales revenue		$100

In this case, both the Cash account and the Sales revenue account increase. One increases using a debit, and the other increases using a credit. Yikes — I know, accounting can be so confusing! Whether an account increases or decreases from a debit or a credit depends on the type of account it is. See Table 4-1 to find out when debits and credits increase or decrease an account.

Make a copy of Table 4-1 and tack it up where you review your department's accounts until you become familiar with the differences.

TABLE 4-1 Effect of Debits and Credits

Account	Debits	Credits
Assets	Increases	Decreases
Liabilities	Decreases	Increases
Income	Decreases	Increases
Expenses	Increases	Decreases