Posted by shanty on .
How do the entries affect account balances and why both debit and credit entries can increase or decrease an account balance?
College Accounting -
since entry is record of a transaction, a transaction has economic or monetary effects. e.g. an expenses of Rs. 20 say results in reduced cash balance and increased expenses.
Therefore entries may result in increase or decrease in balance depending upon the nature of transaction and the nature of account involved.