Revision on Debit and Credit concepts

Front

Purchase a new van for business use with cheque

Back

Debit (Increase) in Asset (Vehicle a/c)

Credit (Decrease) in Asset (Bank a/c)

Front

1. Owner brought in furniture to use in business

Back

Debit (Increase) in Asset (Furniture a/c)

Credit (Increase) in Owner Equity (Capital a/c)

Front

Owner took business cash for personal use

Back

Debit (Increase) in Drawings a/c

Note: Effect on Owner's Equity will be decreasing

Credit (Decrease) in Asset (Cash a/c)

Front

Debtors paid back to business with cheques

Back

Debit (Increase) in Asset (Bank a/c)

Credit (Decrease) in Asset (Debtor a/c)

Front

1. Purchased new factory building with bank loan

Back

Debit (Increase) in Asset (Building a/c)

Credit (Increase) in Liability (Loan a/c)

Front

Paid creditors by cash

Back

1. Debit (Decrease) in Liability (Creditor a/c)

Credit (Decrease) in Asset (Cash a/c)

Front

Return damaged goods to supplier on credit

Back

1. Debit (Decrease) in Liability (Creditor a/c)

2. Credit (Increase) in Return Outwards a/c

Front

Purchased computer on credit

Back

Debit (Increase) in Asset (Computer a/c)

Credit (Increase) in Liability (Creditor a/c)

Front

Sell goods and received cash immediately

Back

Debit (Increase) in Asset (Cash a/c)

Credit (Increase) in OE-Revenue

(Sales a/c)

Front

Paid salaries to worker

Back

Debit (Increase) in OE-Expense (Salary a/c)

• Credit (Decrease) in Asset (Cash or Bank a/c)