Accounting Mnemonics
8 proven memory aids to help you master debits, credits, and key accounting concepts.
DEALER - Debits and Credits
DEALER
The DEALER mnemonic helps you remember which accounts increase with a debit. Dividends, Expenses, and Assets are all increased by debits. The remaining accounts (Liabilities, Equity, Revenue) are increased by credits.
DEAD CLIC - Alternative Debit/Credit Rule
DEAD CLIC
DEAD CLIC is another way to remember debits and credits. DEAD = Debits increase Expenses, Assets, and Dividends. CLIC = Credits increase Liabilities, Income (revenue), and Capital (equity).
ALOE - The Accounting Equation
A = L + OE
ALOE represents the fundamental accounting equation: Assets = Liabilities + Owner's Equity. Every transaction must maintain this balance. This equation is the foundation of double-entry bookkeeping.
GAAP Principles - Girls Are Not Interested
Girls Are Not Interested (Go Away Now, Idiot)
This mnemonic helps remember key GAAP concepts: Going Concern, Accrual Basis, Neutrality, and Independence. These are fundamental assumptions and qualitative characteristics of financial reporting.
Beginning + Net - Div = Ending RE
BND (Beginning + Net Income - Dividends)
The retained earnings equation shows how retained earnings changes over a period. Start with beginning retained earnings, add net income, subtract dividends declared, and you get ending retained earnings.
RICE - Closing Entry Order
RICE
RICE helps remember the order of closing entries at period end: Revenue, Income Summary, Capital (Retained Earnings), and Expenses. Close revenues first, then expenses to Income Summary, then Income Summary to Retained Earnings.
SALY - Profitability Ratios
Same As Last Year (SALY) - Avoid This!
SALY is a warning against blindly using the same analysis as last year. In ratio analysis, always recalculate and consider changing conditions. This mnemonic reminds you to think critically, not just copy prior work.
ARE - Accounts Receivable Entries
ARE (Accounts Receivable Entries)
ARE helps remember the three main types of accounts receivable entries: A = Accrue (record the sale), R = Receive (collect cash), E = Estimate (bad debt expense).
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