Debit and credit Rules Charts of Accounts and Base Building Accounting Terms

Rules for Debit and Credit in accounts

·         Increase in Assets is recorded by Debit

·         Decrease in Assets is recorded by Credit

·         Increase in Liability is recorded by Credit

·         Decrease in liability is recorded by Debit

·         Increase in Owners’ Equity is recorded by credit

·         Decrease in Owners’ Equity is recorded by debit

Rules for Income and Expenses How to Debit & Credit Income and Expenses

Rules for Debit and Credit in detail
Remember

Increase in income will increase in owners’ equity so it will be treated same as income effects

Same increase in expenses will effects on owners’ equity it will decrease it....

Let see the Rules for Debit and Credit

Increase in income will credit because it will increase in capital

Decrease in income will be recorded as debit that means it will decrease the capital

Increase in Expenses is recorded as debit because it will reduce capital that means owners’ equity is going down

Decrease in expenses is recorded as credit because that mean owners’ equity is going high.

Normal Balances of Accounts

Assets normal balance is always debited

Liabilities normal balances is always credited

Owner's Equity Normal balance is always credited

What is Chart of accounts?

Chart of accounts consists of listing of accounts titles and numbers

  

What is posting in Ledger in Accounting?

Posting in ledger is transferring debits and credits from journal to Ledger accounts. In accounting Ledge rising is called classification.