Forget what your bank card taught you about the word "Debit."
The #1 reason freshmen stumble in Financial Accounting 101 is thinking Debit means "minus" and Credit means "plus." Use the DEALER rule and T-accounts become effortless.
The 5-step Financial Accounting 101 mastery system
Memorize the "DEALER" rule for Debits (Left) vs. Credits (Right)
Write DEALER split down the middle: DEA (Dividends, Expenses, Assets) increase with a Debit (left) and decrease with a Credit. LER (Liabilities, Equity, Revenue) increase with a Credit (right) and decrease with a Debit.
Master Accrual Accounting and the 4 Adjusting Journal Entries
Revenue is recorded when EARNED and Expenses when INCURRED—not when cash moves. Drill the 4 period-end adjustments: Prepaid Expenses, Unearned Revenue, Accrued Revenues, and Accrued Expenses (Note: adjusting entries NEVER touch Cash!).
Trace how a transaction flows across all 3 Financial Statements
Follow the chain: Income Statement (Revenues - Expenses = Net Income) → Statement of Retained Earnings (Net Income - Dividends adds to Equity) → Balance Sheet (Assets = Liabilities + Equity) & Cash Flow Statement.
Understand FIFO vs. LIFO Inventory and Depreciation methods
When prices are rising (inflation), FIFO gives the lowest COGS, highest Net Income, and highest Ending Inventory; LIFO gives the highest COGS and lowest taxes.
Use the Indirect Cash Flow rule for Operating Working Capital
Starting from Net Income: add back non-cash Depreciation; an increase in a Current Asset (like A/R or Inventory) is a Cash OUTFLOW (-), while an increase in a Current Liability (like A/P) is a Cash INFLOW (+).
Where Accounting 101 students use AI to save hours
Journal Entry & T-Account Drills
Practice writing balanced Debit/Credit entries for complex multi-part transactions.
FIFO, LIFO & Weighted Average
Walk through perpetual vs. periodic inventory tables and Lower of Cost or NRV.
Depreciation & Bond Amortization
Calculate Straight-Line, Double-Declining Balance, and Bond Discount/Premium tables.
Statement of Cash Flows (O / I / F)
Classify Operating, Investing, and Financing activities without falling for exam traps.
Adjusting Entries at the end of the month NEVER include the Cash account
Every Adjusting Journal Entry pairs one Income Statement account (Revenue or Expense) with one Balance Sheet account (Asset or Liability) to update accruals/deferrals. If you write "Debit/Credit Cash" on an adjusting entry question, it is wrong!
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