mzj30
Feb 26, 2007, 10:33 PM
Why don't the formal financial statements contain debit or credit column?
KongTheKonqueror
Feb 27, 2007, 03:06 PM
Because they are a summary of the balances in the accounts. All the debits and credits in an account are totaled to calculate the value to be put on the financial statements.
CaptainForest
Feb 28, 2007, 02:31 AM
Because it will make the statements look weird.
To understand a financial statement, you need to know what the normal balances are of accounts.
Assets are debits with a few exceptions.
Liabilities and Equity are credits with a few exceptions.
Revenues – credits
Expenses - debits
That is, when you look at cash, 700, you should know that is a debit balance. If it was in fact a credit balance, it would read, (700), so therefore, you could recognize it as a credit balance.