![]() ![]() What are Debits and Credits Used for in Accounting? Video can’t be loaded because JavaScript is disabled: Accounting Equation Demystified | Basic Accounting Equation Explained | Accounting How To () Video explaining the Accounting Equation To decrease those accounts, we debit.įor more information about the Accounting Equation, check out this video: To increase an Equity (Capital), Revenue, or Liability account, we credit. To increase an Asset, Dividend, or Expense account, we debit. The account types are Asset, Liability, Equity, Dividends, Revenue, Expense. An account’s Normal Balance is based on the Accounting Equation and where that account is in the equation. Knowing whether to debit or credit an account depends on the Type of Account and that account’s Normal Balance. We increase and decrease accounts by debiting them or crediting them. In accounting, Debit means the left side of an account and Credit means the right side of an account. ![]() Infographic explaining the Rules of Debit and Credit What Does Debit and Credit Mean in Accounting? If an account decreases equity (withdrawals, expenses), we debit it. This means if an account increase equity (investments, revenue), we credit it. With accounts related to Equity (Investments, Withdrawals, Revenue, and Expenses), we debit and credit the accounts based on the effect on Owner’s Equity.
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