When an account that normally has a debit balance actually has a credit balance and vice versa, it is an indication of an accounting error or of an unusual situation. For example, a credit balance in the office equipment account could result only from an accounting error. On the other side, a debit balance in an account payable account could result from an overpayment. When determining exactly what and where the error is, referring back to this set of Debits and Credits may make the error able to be deciphered very quickly.

We mentioned earlier about journals and accounts as a subject we have just been discussing. The flow of accounting dates from the time that a transaction occurs to its recording in the ledger can be best exemplified by following the transaction – journal discussion. This portion will explain in great depth the how and why of a transaction and its importance in the overall records keeping department. Accurate records and detailed data is valuable in many given instances.