4 ms·
What is T-accounting?
by Konohamaru 6y ago
What is T-accounting?
- cm2187 6y agoThe basic concept behind accounting, the T represents the balance sheet which must be balanced at all time, and every change in the balance sheet is always a tuple of two operations, either on both sides of the balance sheet, or on two lines of the same side. So if you start with an empty balance sheet and a customer comes with cash to deposit, your first operation is: increase deposits | increase cash. Then the bank lends money to a borrower: decrease cash | increase loans to customers. Then the borrower pays an interest: increase cash | increase equity Then you pay some interest to the depositor: decrease cash | decrease equity etc.
- rzzzt 6y agoAlso called double-entry bookkeeping: https://en.wikipedia.org/wiki/Double-entry_bookkeeping https://en.wikipedia.org/wiki/Double-entry_bookkeeping