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Some concepts that need to be understood:
General Ledger – is the central nervous system of BANNER and contains “all the accounts for recording transactions relating to a company's assets, liabilities, …revenue, and expenses.”[1]
Double-entry book keeping – this means that a transaction will always affect two accounts in the general ledger, hence it will be entered twice.[2] For example, when the Biology department purchases 20 microscopes for the student lab, the payment is recorded in the cash assets account and the value of the microscopes is recorded in the expenses account.
T-account – this is a visual representation of what happens in a double-entry book keeping system. Each account will be represented by its own “T.”[3]
… and now for credits and debits. On a T-account, the left side is always the debit side. The right side is always the credit side. The type of account will determine whether the credit or debit will increase or decrease the balance of the account. Here’s what that looks like in a general sense[4]:
Here’s a visual representation of the Biology microscope example:
These two entries comprise one transaction in the general ledger.
[1] http://en.wikipedia.org/wiki/General_ledger
[2] https://en.wikipedia.org/wiki/Double-entry_bookkeeping_system
[4] http://www.dummies.com/how-to/content/knowing-your-debits-from-your-credits.html
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