Debits and Credits Used To Record Transactions
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NOTE: Simply place your mouse cursor over the Type Of Account Debited and Credited.
There is no need to click the answer. |
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Type of
Account Debited and Credited |
Effect On Accounting Equation
Assets = Liabilities + Owner's Equity Note:Debit Account Balances on the Left Side of the equation represent increases. Credit Account Balances on the Left Side of the equation represent decreases. Debit Account Balances on the Right Side of the equation represent decreases. Credit Account Balances on the Right Side of the equation represent increases. |
| Transaction 1. Owner invests personal cash in business. | |
| Debit an Asset and Credit an Asset | Increases an Asset / Decreases an Asset |
| Debit an Asset and Credit Revenue | Increases an Asset / Increases Revenue (Increases Equity) |
| Debit an Asset and Credit Liabilities | Increases an Asset / Increases Liabilities |
| Debit an Asset and Credit Owner's Equity | Increases an Asset / Increases Owner's Equity |
| Debit a Liability and Credit an Asset | Decreases a Liability / Decreases an Asset |
| Debit Draw and Credit an Asset | Increases a Draw (Reduces Equity) / Decreases an Asset |
| Debit an Expense and Credit a Liability | Increases an Expense (Reduces Equity) / Increases a Liability |
| Debit an Expense and Credit an Asset | Increases an Expense (Reduces Equity) / Decreases an Asset |
| Transaction 2. Owner invests equipment in business. | |
| Debit an Asset and Credit an Asset | Increases an Asset / Decreases an Asset |
| Debit an Asset and Credit Revenue | Increases an Asset / Increases Revenue (Increases Equity) |
| Debit an Asset and Credit Liabilities | Increases an Asset / Increases Liabilities |
| Debit an Asset and Credit Owner's Equity | Increases an Asset / Increases Owner's Equity |
| Debit a Liability and Credit an Asset | Decreases a Liability / Decreases an Asset |
| Debit Draw and Credit an Asset | Increases a Draw (Reduces Equity) / Decreases an Asset |
| Debit an Expense and Credit a Liability | Increases an Expense (Reduces Equity) / Increases a Liability |
| Debit an Expense and Credit an Asset | Increases an Expense (Reduces Equity) / Decreases an Asset |
| Transaction 3. Business receives cash from bank loan. | |
| Debit an Asset and Credit an Asset | Increases an Asset / Decreases an Asset |
| Debit an Asset and Credit Revenue | Increases an Asset / Increases Revenue (Increases Equity) |
| Debit an Asset and Credit Liabilities | Increases an Asset / Increases Liabilities |
| Debit an Asset and Credit Owner's Equity | Increases an Asset / Increases Owner's Equity |
| Debit a Liability and Credit an Asset | Decreases a Liability / Decreases an Asset |
| Debit Draw and Credit an Asset | Increases a Draw (Reduces Equity) / Decreases an Asset |
| Debit an Expense and Credit a Liability | Increases an Expense (Reduces Equity) / Increases a Liability |
| Debit an Expense and Credit an Asset | Increases an Expense (Reduces Equity) / Decreases an Asset |
| Transaction 4. Business writes a check to buy equipment using the cash provided from the bank loan. | |
| Debit an Asset and Credit an Asset | Increases an Asset / Decreases an Asset |
| Debit an Asset and Credit Revenue | Increases an Asset / Increases Revenue (Increases Equity) |
| Debit an Asset and Credit Liabilities | Increases an Asset / Increases Liabilities |
| Debit an Asset and Credit Owner's Equity | Increases an Asset / Increases Owner's Equity |
| Debit a Liability and Credit an Asset | Decreases a Liability / Decreases an Asset |
| Debit Draw and Credit an Asset | Increases a Draw (Reduces Equity) / Decreases an Asset |
| Debit an Expense and Credit a Liability | Increases an Expense (Reduces Equity) / Increases a Liability |
| Debit an Expense and Credit an Asset | Increases an Expense (Reduces Equity) / Decreases an Asset |
| Transaction 5. Business buys a building using an owner financed 10 year loan. | |
| Debit an Asset and Credit an Asset | Increases an Asset / Decreases an Asset |
| Debit an Asset and Credit Revenue | Increases an Asset / Increases Revenue (Increases Equity) |
| Debit an Asset and Credit Liabilities | Increases an Asset / Increases Liabilities |
| Debit an Asset and Credit Owner's Equity | Increases an Asset / Increases Owner's Equity |
| Debit a Liability and Credit an Asset | Decreases a Liability / Decreases an Asset |
| Debit Draw and Credit an Asset | Increases a Draw (Reduces Equity) / Decreases an Asset |
| Debit an Expense and Credit a Liability | Increases an Expense (Reduces Equity) / Increases a Liability |
| Debit an Expense and Credit an Asset | Increases an Expense (Reduces Equity) / Decreases an Asset |
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