In all journal entries the debit amount must equal the credit amount?

Answer 1

True: In double entry accounting the debits and credits must balance.

For every action there is an equal and opposite reaction: Meaning, if you debit your cash for $1500 there has to be a credit that equals the same amount.

Remember the accounting equation: Assets = Liabilities + Owners Equity

Let's look at a few scenarios of why we might have received $1500 cash and the accounts they would be posted to:

1. We received $1500 cash for services rendered (revenue) our entry would be:

Cash (debit) $1500

Revenue (credit) $1500

2. We received cash from a customer who purchased merchandise on account, our entry would read:

Cash (debit) $1500

Account Receivable (credit) $1500

3. We Invested $1500 of our personal money into our business: the entry will be:

Cash (debit) $1500

Owners Equity (credit) $1500

As you notice there are always an equal debit to a credit, even if more than one account needs to be used, once such scenario, say we paid $1500 for Phone and Rent and we want to record the transaction as one, we'd use the following journal entry:

Phone Expense (debit) $300

Rent Expense (debit) $1200

Cash (credit) $1500

Notice that even though we used three separate accounts, the debits and the credits always balance for a total of $1500