Understanding how to use debits and credits to check financial performance is pretty simple once you learn it! Here’s how I explain it:
Tracking Transactions: Every time money changes hands, it gets recorded as either a debit or a credit. This helps you see where money is coming in and where it’s going out.
Balances: You can easily check the balance of your accounts. For example, if your assets go up (that’s a debit), it’s a good sign for your financial performance.
Financial Statements: By looking at the debits and credits in your records, you can figure out if you’re making money or losing it. This is known as your bottom line.
Using this method is a useful way to understand your financial health better!
Understanding how to use debits and credits to check financial performance is pretty simple once you learn it! Here’s how I explain it:
Tracking Transactions: Every time money changes hands, it gets recorded as either a debit or a credit. This helps you see where money is coming in and where it’s going out.
Balances: You can easily check the balance of your accounts. For example, if your assets go up (that’s a debit), it’s a good sign for your financial performance.
Financial Statements: By looking at the debits and credits in your records, you can figure out if you’re making money or losing it. This is known as your bottom line.
Using this method is a useful way to understand your financial health better!