Debits and credits DC ADE LER

[@HS-PGX]

WHY DID U FIND THIS CHANNEL ONLY ON THE DAY OF MY MIDTERMS!!!!!!????!!! YOU ARE A LIFESAVER. Some Slavic dude has taught me more than my boring professor.

[@TheFinanceStoryteller]

Hahaha! Better late than never, Aiyahpol! By the way, I am a Dutch dude. ;-)

[@HS-PGX]

The Finance Storyteller vielen daank!! (Sorry I only speak german lmao)

[@TheFinanceStoryteller]

Gern geschehen! Auf Deutsch geht es auch. :-)

[@HS-PGX]

The Finance Storyteller vielen Dank für deine Hilfe!!!!

[@erlianamaegarcia7194]

😭

[@JayJay-sg7zl]

I was stuck until I saw ur video. My teacher is horrible. It took u 3 minutes to help me understand. He taught for 4 hours and my head was spinning. What is crazy is I passed calculus with an A and I could not even understand what he was teaching. Thank you for ur help

[@TheFinanceStoryteller]

Happy to help! And great to hear that you go look for additional resources like videos from my channel and other KZbin channels to master this topic. Hope you will come back often, there are several other videos in this playlist that might be helpful for you: kzbin.info/www/bejne/hYrUnWqPbrOheMk

[@franmcdonald4702]

Same here . had calculus in college why is this so confusing??

[@juliebartholomew2996]

You are a GREAT teacher! I have learned so much.

[@TheFinanceStoryteller]

Thank you, Julie! Happy to hear that & happy to help. Please subscribe to the channel, and spread the word to friends and colleagues! 🙂

[@suyounoh5362]

Wow ! I've tried watching many other videos but none of them were as helpful as yours. I loved how you showed us the examples! so much eaiser to understand :) Thank you so very much!

[@TheFinanceStoryteller]

You're welcome! Happy to help. Please share with your friends and colleagues.

[@azu9256]

3:46 in this part i dont get it? sorry im still very new to accounting and i just want to prepare myself for the school year where i will be taking accounting as one of my subjects😢

[@TheFinanceStoryteller]

Well done on getting a headstart! It might be easier to watch my video on the relationship between balance sheet and income statement first. That one connects the business steps to the financial recording of the event. Let me know if this clarifies things: kzbin.info/www/bejne/rYvHkol7jZlkjbM

[@azu9256]

@@TheFinanceStoryteller thanks! 😇

[@harikrishnagupta284]

Thank you Sir, Excellent presentation. DEA LER...DEALER is to remember.

[@TheFinanceStoryteller]

You are welcome!

[@dhiviyasegar3102]

Life Saviour 👍🏼 thank you for making me understand on these double entry which I was confused over 10years of completing my accounting. It’s all started with my teacher at high school who made these a disaster. Thereafter, it was a nightmare for me to answer double entry questions.. I randomly opened this video just to make sure, I understand it well. And you made it simple. Thanks a million.

[@TheFinanceStoryteller]

Happy to help! Congratulations for getting there in the end. 😉 More good stuff in the Accounting 101 playlist, check out my recent "accounting principles" video for example: kzbin.info/www/bejne/a2HHq6enoNKcfMk&pp=gAQBiAQB

[@zaracheung4913]

Thankq!!! Exam's approaching I wish I found this channel earlier...

[@TheFinanceStoryteller]

Wishing you all the best for your exam preparations, Zara!!! Take a look at my playlists, like accounting 101, there might be more useful stuff for you there, such as the video explaining the relationship between income statement and balance sheet: kzbin.info/www/bejne/rYvHkol7jZlkjbM

[@KumR]

This is best channel ever.

[@TheFinanceStoryteller]

Thank you, Shiv! :-)

[@konstancyja82]

Zara, thats right, its an amazing channel. I so understand you 😅

[@tammygoff4135]

Great Video!! I am taking Managerial Accounting and this is very helpful thank you!!

[@TheFinanceStoryteller]

So happy to hear that! Please subscribe, and spread the word. :-) I think there might be more useful videos for you in the Accounting 101 playlist: kzbin.info/www/bejne/mGqWfHWjmL2UpKs

[@tammylittle2316]

@@TheFinanceStoryteller just subscribed thank you!!

[@Sol-Amar]

​@@tammylittle2316Get your CPA yet?

[@vizii8111]

Thank you so much for your video! But I don't get couple things. Why revenue is under credit and Expense under debit? When I think about credit I think owed and debit something owned. Should be expense same side as liabilities and revenue same column as asset? It's confusing to understand. 🤔

[@TheFinanceStoryteller]

You are part of the way there: "When I think about credit I think owed and debit something owned" is correct for the balance sheet. You need to go through a good number of journal entries to see how things connect. I think my video on T accounts might help on that: kzbin.info/www/bejne/nGK3dYGeqrV9gsU Example: if you record an invoice for cleaning services that the company received, you book Debit Cleaning expenses Credit Accounts Payable (a liability to the supplier) At the end of the accounting period, when we prepare the final income statement and the balance sheet, that debit in cleaning expenses affects (reduces) equity on the balance sheet. Per the accounting equation: assets equal liabilities plus equity kzbin.info/www/bejne/hYrUnWqPbrOheMk Hope this helps. Take it step by step!

[@vizii8111]

@@TheFinanceStoryteller I appreciate for getting back to me so quickly. I'll check out the videos you recommended. Thank you so much!

[@TheFinanceStoryteller]

How are you doing? Hope you are making good progress.

[@terrenceolivido741]

right away he speaks clearly, with the correct pace and he shows diagrams in sync with the narrative. wow ..., the minute i open a video and hear the horrible - often indian - accents, i turn it off. others try to be flashy and speak rapidly. i refuse all those videos.

[@TheFinanceStoryteller]

Thank you for the compliments. Please share with friends and colleagues.

[@philipjose8092]

brilliant and beautiful exposition of basics.

[@TheFinanceStoryteller]

TYSM! Have a look at the rest of the Accounting 101 playlist, there might be more useful videos for you in there: kzbin.info/www/bejne/hYrUnWqPbrOheMk&pp=gAQBiAQB

[@rojanabe8244]

You are an amazing teacher!

[@TheFinanceStoryteller]

Thank you! 😃

[@imranazman8474]

Thankyou sir, i finally understand after visiting many websites. Thankyou sir

[@TheFinanceStoryteller]

Nice to hear that! Wishing you lots of success in applying it.

[@franmcdonald4702]

I need to understand the why . not just another formula to memorize.

[@TerryOnDemand]

I'm confused on the Equity portion.... Why wouldn't Equity be considered an Asset. Let's say a person has $50,000 equity in their home. The "equity" wouldnt go on the Assets column?? Thanka so much! You're videos are so helpful!

[@TheFinanceStoryteller]

Hi LaToya! Take a look at my video on the relationship between income statement and balance sheet. It tells the story of starting a small company, with shareholders contributing equity, then starting operations, etc. kzbin.info/www/bejne/rYvHkol7jZlkjbM It will start to make sense!

[@dilhack2682]

If you think of it as what is owned vs what is owed, the *company* owns the Asset, but *owes* the equity to the owners/shareholders and the liabilities to creditors. Nothing in the company ultimately belongs to the company, but individuals or other companies. So an asset of the company is equity to its owners. That's how I've drawn the line at least...

[@sandylawless414]

Absolutely amazing video. Thank you. Explained everything clearly

[@TheFinanceStoryteller]

Glad it was helpful, Sandy! Videos on related topics in this playlist: kzbin.info/www/bejne/hYrUnWqPbrOheMk&pp=gAQBiAQB

[@blancamalleu2406]

Hello, I have a question. Is this known as Balance sheet or Statement of financial position? Like if the exam asks me do a Balance sheet, am I meant to draw this?

[@TheFinanceStoryteller]

Hello Blanca! Here's the link to my balance sheet tutorial, the same playlist has case studies of the Apple and Tesla balance sheets as well. Best to learn from real world examples! kzbin.info/www/bejne/m3rNdJSbg9JgjM0&pp=gAQBiAQB

[@ryangray600]

Genuinely thank you.

[@TheFinanceStoryteller]

You're welcome! Thank you for watching and commenting.

[@stikkippy1481]

My favorite ASMR channel

[@aymarmaylinpinedodelgado3048]

Bro said ASMR😂, this a headache for mehhh😢

[@gillyk3466]

Guys memorize itu with DEALER Dr (DEA) CR LER Sumple

[@TheFinanceStoryteller]

If that works for you, then by all means use it!

[@zeushelios-xb7cl]

Good thing I found this gem now, otherwise I would fail in my exams next month , my professor shows PPT reads it loud and goes, such a good professor he is

[@TheFinanceStoryteller]

Sorry to hear that about your professor. Well done on finding other sources of information that can help you learn!

[@zeushelios-xb7cl]

@@TheFinanceStoryteller yes sir 🫡 thank you for making it simple and understandable

[@TheFinanceStoryteller]

Please share the link to the channel/videos with your classmates! :-)

[@batuhanmertunal1267]

Accounting in english is very hard or I can't get these because my english is bad :(

[@TheFinanceStoryteller]

Hi! If you stick with it, you will get there!!! Have a look at the related videos in this playlist, they might help get you going: kzbin.info/www/bejne/mGqWfHWjmL2UpKs

[@LorenzoAvila-gx3vi]

what helped me understand what how you split a,L,e and d,e,r tied e

[@TheFinanceStoryteller]

Good to hear that, Lorenzo! Related videos are available in the Accounting 101 playlist: kzbin.info/www/bejne/hYrUnWqPbrOheMk&pp=gAQBiAQB

[@potter0708]

Brilliant video

[@Lucid-xz2uh]

THANK YOU THANK YOU THANK YOU THANK YOU SO MUCH SIR 😭

[@TheFinanceStoryteller]

Happy to help!

[@R3yr3yproductions]

thank you so much for helping me

[@TheFinanceStoryteller]

You are most welcome, Areli!

[@abilkassymaman681]

Great teaching syllabuses 🎉

[@TheFinanceStoryteller]

Thank you! 😃

[@dhirajshetty483]

Great Video !! thanks !

[@TheFinanceStoryteller]

You're welcome, Dhiraj! Thank you for watching and commenting.

[@QualitativeInvestor]

DADE vs CLER

[@TheFinanceStoryteller]

Exactly. Or DEAD CLIC, or whatever other way helps to memorize and understand debits and credits!

[@coolbeans470]

about to start entry level accounting tmrw. JEs are still hard

[@TheFinanceStoryteller]

Keep working it! The more JEs you post, the more sense they make. There might be some more useful videos for you in my Accounting 101 playlist: kzbin.info/www/bejne/hYrUnWqPbrOheMk

[@coolbeans470]

@@TheFinanceStoryteller thanks they havent noticed anything yet today due to paperworks.

[@blast2686]

Plz explain what is Bull and Bear market

[@TheFinanceStoryteller]

Bull market = a market in which share prices are rising, encouraging buying. Bear market = falling prices and typically shrouded in pessimism.

[@blast2686]

@@TheFinanceStoryteller By how much should it increase or decrease?

[@TheFinanceStoryteller]

It's just a figure of speech, for journalistic narrative. Not to be taken too seriously.

[@RR-et6zp]

DEALER

[@RR-et6zp]

Credit adds negative, Debit adds positive. DEALER

[@stevehursh9997]

Why is the word "debit" used to indicate an increase on an account, when the word actually means "to remove" or "take away from" just like it is used with a standard bank account?

[@TheFinanceStoryteller]

Hello Steve! I agree that this can be a bit confusing. In accounting, asset accounts increase by recording more debits to it, and decrease by recording credits to it. Liability and equity accounts increase by recording more credits to it, and decrease by recording debits to it. In relation to bank statements, debit and credit positions are seen from the perspective of the bank's balance sheet. If you open a bank account and deposit cash with your bank, then the bank will record on their balance sheet a debit to cash, and a credit to liabilities (they owe you the money back). On the statement they provide you, it shows a credit balance: the bank owes money to you. If you then pay bills from your bank account, or retrieve money, you "debit" your account in their books. The outstanding balance that the bank owes back to you decreases.

[@towtruckn]

The literal definitions for credit and debit come from Latin meaning respectively "a thing entrusted to another" a credit, and "something that is owed," a debit, but as The Finance Storyteller points out with so many accounts its a little confusing. For the purposes of accounting despite their real meaning it is best to think of a Debit as being on the Left and a Credit as always being on the Right. When referring to the accounting equation Assets = Liabilities + Equity all associated Asset accounts on the Left always have a "Normal Debit Balance" and all Accounts on the right side relating to Equity, Revenue, and Liabilities have a "Normal Credit Balance". When referring to T accounts; once again the Debit side is always on the Left and the Credit side is on the Right irrespective of the normal balance of the account. Once you understand the acronym DC ADE LER and it finally clicks you'll get over the hump that truly stands in the way of most accounting students understanding the fundamentals of debits and credits.

[@dhirajshetty483]

@@TheFinanceStoryteller excellent explanation !

[@dhirajshetty483]

@@towtruckn great explanation !

[@dhirajshetty483]

super question ! I meant to ask the same !

[@s.colors9850]

👍

[@asiyaasiya1460]

Hi Iam Turkish and our accounting system is different from this so I wanna work as romote and I must need to learn this system could anyone help me and share their experience

[@TheFinanceStoryteller]

Hello Asiya! Hopefully the videos in my accounting 101 playlist can give you a good start: kzbin.info/www/bejne/hYrUnWqPbrOheMk&pp=gAQBiAQB

[@anthonygirdler606]

You've said "Asset accounts increase by recording more debits to it, and decrease by recording credits to it" This is like saying "If you have $100 cash and you debit $10 you will have $110" This is obviously wrong. Please explain. Using a convoluted acronym and shoving things on certain sides of an equation does not explain anything. It just assumes we accept the initial premise....which I don't. Your inventory example is a classic case of assuming the understanding as part of creating the understanding. How is inventory a debit (debt?) this makes no sense. Surely if you have inventory you have credit ?

[@TheFinanceStoryteller]

Having a credit balance in your bank account means the bank owes you money.

[@perrycomeau2627]

It's all algebra to me.

[@TheFinanceStoryteller]

Try different angles to understand it better. Here's an example of the steps involved in starting a business, and related recording of the financial aspects of these transactions: kzbin.info/www/bejne/rYvHkol7jZlkjbM

[@aryaman4068]

I love this channel

[@TheFinanceStoryteller]

Me too! 😉

[@maxnottingham6616]

I prefer DEAD CLIC.

[@TheFinanceStoryteller]

I love that one too, Max! Whatever works for you. :-)

[@maxnottingham6616]

@@TheFinanceStoryteller Definitely agree. Depends on what you learn first or sticks in mind.

[@TheFinanceStoryteller]

Somebody tried to explain me a way to remember it by counting fingers or something like that, which thoroughly confused me. ;-)

[@fouad69]

May god bless you

[@TheFinanceStoryteller]

Thank you!

[@semaaktas6]

thank youuu💖

[@TheFinanceStoryteller]

You're welcome 😊

[@affanahmed9066]

Better use DEA LER

[@TheFinanceStoryteller]

Use whatever suits you best! For me ADE LER is the more logical version in terms of "seniority" of the letters, as the accounting equation states that Assets = Liabilities + Equity (on the balance sheet), while Expenses and Revenue are in the income statement, and Dividends only come into play once the company has successfully completed a few (or many) profitable years.

[@tonythomas7825]

in 2:30 sec you say the inventory shows debit balance but when we do accounting, as per above example it comes to credit right? below total of 150 in both side and less 30 with balance brought down 120$ in credit so 120$ + 30$ = 150$ in credit? please correct me

[@TheFinanceStoryteller]

Hi Tony! Not quite following your reasoning there. Let me try to explain what is behind the story I tell about inventory in the video, and see if that helps explain it: You start the accounting period with a debit balance in inventory of 100 (carried over from the closing balance of the previous accounting period) You account for purchases of new inventory (leading to more inventory in the warehouse): debit inventory 50 credit accounts payable 50 You account for the inventory movement during a sales transaction (leading to less inventory in the warehouse): debit cost of goods sold 30 credit inventory 30 Sum of the debits in inventory 150 minus sum of the credits in inventory 30 = new ending balance of 120 debit. Maybe my video on the relationship between the income statement and the balance sheet can help you kzbin.info/www/bejne/rYvHkol7jZlkjbM or the video on how to record closing entries at the end of the accounting period kzbin.info/www/bejne/eYnMfH-ql5ynp6s

[@tonythomas7825]

@@TheFinanceStoryteller ohk thanks a lot for your quick response.

[@TheFinanceStoryteller]

@@tonythomas7825 You're welcome! Happy to help.

[@usejiown]

it is good for me! thanks❤

[@TheFinanceStoryteller]

I'm glad! Happy to help! :-)

[@anon014]

My biggest mistake is i didn't do any research during my study

[@TheFinanceStoryteller]

The best time to plant a tree was twenty years ago, the second best time is today! ;-)

[@shaina1879]

Hi , I want to add Chinese subtitles for this video, how can I do it?

[@shaina1879]

the contents are fantastic, and I hope more people can see it!!

[@TheFinanceStoryteller]

Thanks for the offer. There have been cases in the past of people providing spam or advertising in what they claimed to be subtitles, so the subtitle feature for other languages has been disabled.

[@hcp0scratch]

A+!!!!! TY!

[@TheFinanceStoryteller]

Thank you! Maybe the other videos in my "Accounting 101" playlist could be helpful for you too: kzbin.info/www/bejne/hYrUnWqPbrOheMk

[@xcdom324]

Super helpful!

[@TheFinanceStoryteller]

Glad you think so!

[@injihwang4081]

Genius!!!! Thank you so much.

[@TheFinanceStoryteller]

You're welcome! More videos on accounting basics in this playlist: kzbin.info/www/bejne/hYrUnWqPbrOheMk

[@danij9956]

You made this so easy! shared the playlist with my Professor and classmates

[@TheFinanceStoryteller]

Wonderful!!! I love it when I can reach more people with my videos. I hope every passes the exams with a good grade.