The Rules of Recording in Account

The Rules of Recording
in Account

DEBIT Increase in Assets Accounts Decrease in Liabilities Accounts Decrease in owner’s Equity

CREDIT 

Decrease in Assets Accounts

Increase in Liabilities Accounts

Increase in owner’s Equity

The Rules of Debit and Credit
on Assets

• To INCREASE an ASSET – type account, enter the amount on the DEBIT side
• To DECREASE an ASSET – type account, enter the amount on the CREDIT side

 

• All assets accounts should have DEBIT BALANCE at the end of the period because increases can be expected to exceed decreases

Types of an Equity Accounts

• Owner’s Equity Account
• Owner’s Withdrawal Account
• Revenue Account  Expenses Account

Revenue and Expenses Accounts are called Nominal Account/ Income Statement Accounts

The Rules of Debit and Credit in Income and Expenses




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