Time remaining:
STUDY EMERGENCY

This student is having a study emergency. Tutors are expected to be highly responsive and quick answering this question.

Debits and Credits for Financial Accounting

Accounting
Tutor: None Selected Time limit: 0 Hours

Can someone explain debits and credits for me for financial accounting. My professor is doing a terrible job of explaining how they work.

Dec 4th, 2016

Debit and Credit Definitions

Business transactions are events that have a monetary impact on the financial statements of an organization. When accounting for these transactions, we record numbers in two accounts, where the debit column is on the left and the credit column is on the right.

In financial accounting debit and credit are simply the left and right side of a T-Account respectively. They are used to indicate the increase or decrease in certain accounts. When there is a change in an account, that change is indicated by either debiting or crediting that account according to following rules:

  • Assets and Expenses
    An increase is recorded as debit (left side)
    A decrease is recorded as credit (right side)
  • Liabilities, Equities and Revenues
    A decrease is recorded as debit (left side)
    An increase is recorded as credit (right side)
  • Contra-accounts
    Contra-accounts behave exactly in opposite way to the respective normal accounts.

Jan 27th, 2015

Are you studying on the go? Check out our FREE app and post questions on the fly!
Download on the
App Store
...
Dec 4th, 2016
...
Dec 4th, 2016
Dec 4th, 2016
check_circle
Mark as Final Answer
check_circle
Unmark as Final Answer
check_circle
Final Answer

Secure Information

Content will be erased after question is completed.

check_circle
Final Answer