Recording Entries Using BSE

Recording Entries Using The Balance Sheet Equation

Learning Objectives

  1. Record entries using the balance-sheet equation (BSE) approach.
  2. Trace effects of entries to balance-sheet line items.
  • Click the Express Route video below on recording entries.
  • Click the Interactive Exercise to practice recording entries.
  • If you’re ready to start the exercises, click the Exercise link below. Go back to the video if you need more help.

Express Video:

 Click here for the Express Route video [12 minutes]



 Ready to do exercises?   Click for exercises for this module




Key terms:

  • Balance-sheet-equation model- Record-keeping approach using a matrix to aggregate the effects of accounting entries where columns are accounts organized by the balance sheet equation (A=L+OE) and rows are entries or balances. Also referred to as BSE model.

  • Account sign- Represents the account’s impact on its primary balance-sheet class (+/-).

  • Entry sign- Represents the entry’s affect on the account, either increase or decrease (+/-).

  • Mini-BSE matrix- Derived from the full balance-sheet-equation matrix by eliminating rows and columns that do not pertain to a specific entry.