How to record T-Accounts or Rules of Debit and Credit

The format in which every financial transaction is recorded is called T-Account. And remember every Business Financial Transaction has two effects that are called Debit and credit. Today we will earn about Creating T-Accounts or Concepts about Debit and Credit record keeping. This training session will help you how to deal Debit side of T - Accounts and Same as Credit side.

Recording Business Transaction is not hard and fast, actually it’s depending upon your Base Equation that is called Accounting Equation.

Assets = Liabilities + Owners Equity

Now keep in mind this Accounting Equation

·         Assets are on left side

·         Liabilities are on right side

·         Owners’ Equity are on right side

So just fallow this rule

>>> Increase in assets will be on left side that mean Dr.( Debit)

>>> Increase in owners’ equity will be on right side mean Cr.(Credit)

>>> Increase in Liability will be right side mean Cr(Credit)

In in case of Decrease the above picture all entries will be recorded opposite

>>> Decrease in assets will be Credit

>>> Decrease in owners’ equity will Debit

>>> Decrease in Liability will be Debit

Hope this article will help to understand the base building about Financial statement please comments in case of any question you like to ask