Mastering the Fundamental Accounting Equation: D-C-A-D-L-E-R Explained (Full Transcript)

Speaker 1: Welcome to CPA Strength. This is Jonathan Dorn, licensed CPA in the state of Florida. Let's get it in. I'm going to show you one of the only accounting equations that you're going to ever need. This is day one stuff and this will carry you through to a CPA if you choose to be one. I still write it on my papers, although this, what I'm going to write down, is ingrained in my mind forever. So, let's get it started. What you're going to want to write is D-C-A-D-L-E-R. So you got that? D-C-A-D-L-E-R. Now, just somehow memorize that. I don't care how you're going to memorize it. Just memorize it, okay? I don't care how you're going to do it. Just do it. So, why is that important? Well, I'm going to write it back up over here. D-C-A-D-L-E-R. And, because I'm going to write it here, we're going to write debit. D is for debit. The C is for credit. Debit. Debit. Credit. Now, in accounting, these are always, always going to equal. Debit is going to equal the credit. That's kind of small, huh? That's kind of small. We've got to see that debit. It's very important. Debit. Now, in the accounting world, debit is always going to equal the credit. Always, always, always, always. So, now, for the debit side, we've got the aid. We've got A-D- and then for the credit side, we've got L-E-R. Okay? L-E-R. Now, D-C-A-D-L-E-R. D-C-A-D-L-E-R. On aid, we've got assets. Assets. And then we have draw. Okay? Then we have, for the E, expenses. Alright? Now, for the credit side, with LER, we have liability. Okay? You've got your equity. Alright? And you've got your revenue. I don't know how you spell, huh? Revenue. Okay. So, that's what you've got. Now, this is all you'll ever need. And it totally works. This is day one stuff. You're just going to have to go with the flow for a while when you're first starting out. Okay? But, D-C-A-D-L-E-R. I have an accounting degree from Florida Atlantic University. The state of Florida gave me a CPA license and I still use this. So, although it's in my head. But, I think I'm just going to end this one up. Just learn this. Write this down. Subscribe to the page. If you like this, like it. We're going to have lots more. I'm going to have a whole series going through the whole steps of income statement balance sheet. So, subscribe to the page. See more. CPA strength. Because I am, hold on. That's kind of weak. But, I am going to be the strongest CPA in Florida. Eventually, America. So, peace.