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Debit and Credit Rules

This document outlines basic debit and credit rules for accounting. It explains that assets equal liabilities plus owner's equity. It also defines the normal balances and increase/decrease sides for key accounting accounts like assets, liabilities, owner's equity, revenues, expenses, and drawings. Debits generally increase asset and expense accounts, while credits generally increase liability, owner's equity, and revenue accounts.

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Yonas D. Ebren
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187 views1 page

Debit and Credit Rules

This document outlines basic debit and credit rules for accounting. It explains that assets equal liabilities plus owner's equity. It also defines the normal balances and increase/decrease sides for key accounting accounts like assets, liabilities, owner's equity, revenues, expenses, and drawings. Debits generally increase asset and expense accounts, while credits generally increase liability, owner's equity, and revenue accounts.

Uploaded by

Yonas D. Ebren
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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Debit and Credit Rules

Assets = Liabilities + Owner’s Equity


Asset Accounts Liability Accounts Owner’s Capital Account

Debit Credit Debit Credit Debit Credit


+ - - + - +

Temporary Owner’s Equity Accounts

Expense Accounts Drawing Accounts Revenue Accounts

Debit Credit Debit Credit Debit Credit


+ - + - - +

Debits Credits
+ Assets -
+ Withdrawal(Drawing) -
+ Expenses -
- Liabilities +
- Owner’s Capital +
- Revenue +

Account Increase Side Decrease Side Normal Balance


Asset Debit Credit Debit
Liability Credit Debit Credit
Owner’s Capital Credit Debit Credit
Revenue Credit Debit Credit
Drawing Debit Credit Debit
Expense Debit Credit Debit

If an account is increased with If an account is increased with a Since there are usually more
a debit, it will be decreased credit, it will be decreased with a increases than decreases in an
with a credit. debit. account, the normal balance is the
same as the increase side.

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