What is A Debit & Credit - Leigh Barker Tangible Assets

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What is A Debit Credit

• Leigh Barker Tangible Assets

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Debit - Credit

• Within the accounting system the concept of
  double entry bookkeeping whereby every accounting
  transaction affects at least two accounts.
• The entry recorded on the left is known as the
  debit and the entry recorded on the right is
  known as the credit.
• The debit entry can increase an asset or expense
  and decrease an income or liability account
  whereas a credit can decrease an asset or expense
  account and increase an income or liability
  account.

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Rules that govern the use of debits and credits

• Within the accounting process there are rules
  that govern to use of debits and credits
• Accounts with a debit balance increase when a
  debit is entry is added
• Accounts with a credit balance increase when a
  credit is entry is added
• The total dollar value of all debits must equal
  the total dollar value of all credits

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The most common accounts

• The most common accounts where debits and credits
  are applied are as follows
• Sales debit accounts receivable credit sales
• Sales Invoice Paid debit bank credit accounts
  receivable
• Cash Sales debit bank credit sales
• Cash Purchase debit expense account credit
  bank
• Bank Loan debit bank credit loan payable
• Repay a Loan debit loan payable credit bank
• Pay Employees debit wage expense credit bank
• Bank Interest debit interest expense credit
  bank

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Leigh Barker Tangible Assets

• Please note Prepared by Leigh Barker Tangible
  Assets, Accountant at MWC Group, Portfolio
  Finance, Gordon and West Pennant Hills.
• Note that all content of this blog is general in
  nature and anyone intending to apply the
  information to practical circumstances should
  seek professional advice to independently verify
  their interpretation and the informations
  applicability to their particular circumstance.