Double - Entry Accounting System

Accounting
Tutor: None Selected Time limit: 1 Day

Define debit and credit and explain how assets, liabilities, common stock, retained earnings, revenues, expenses, and dividends are affected by (increased or decreased) by debits and by credits.

Nov 13th, 2014

What is a Debit?

In simple terms debit means receiving the benefit from various sources like receiving any assets and services.

What is a Credit?

The same benefit is given by you to some one or any organisation is called as credit.

So receiving and giving the benefit is called debit and credit respectively.

Note:

  • Assets, common stock, expenses are increased then we are getting more benefit.

So these are all debited. And the same time if it is decreased our benefit has gone down. So it is credited

  • Liabilities, revenues and dividends are increased then these are credited and decreased then it should be debited

Nov 13th, 2014

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Nov 13th, 2014
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