Concept explainers
Journal entry is a way of recording the financial transaction of the company related to certain dates that shows chronological effect in the books of accounts. Journal entries are recorded on the basis of dual aspect accounting method.
Accounting Rules for Journal Entries:
⮚ To increase balance of the account: Debit assets, expenses, losses and credit all liabilities, capital, revenue and gains.
⮚ To decrease balance of the account: Credit assets, expenses, losses and debit all liabilities, capital, revenue and gains.
Depletion of Natural Resources:
Depletion of natural resources also considered as crucial part just as the
To prepare: Journal entry to record both the ore deposit depletion and the mining machinery depreciation for MM Company.
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Fundamental Accounting Principles
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