Revision on Debit and Credit concepts

Front

Purchase a new van for business use with cheque

Back

Increase in Asset --> Debit Van a/c

Decrease in Asset --> Credit Bank a/c

Front

1. Owner brought in furniture to use in business

Back

Increase in Asset --> Debit Furniture a/c

Increase in Owner Equity --> Credit Capital a/c

Front

Owner took business cash for personal use

Back

Decrease in Owner's Equity --> Debit Drawings a/c

Decrease in Asset --> Credit Cash a/c

Note: Withdrawal of business resources for personal use will reduce owner's capital invested

Front

Debtors paid back to business with cheques

Back

Increase in Asset --> Debit Bank a/c

Decrease in Asset --> Credit Debtor a/c

Note: amount owing by customer on credit reduced

Front

1. Purchased new factory building with bank loan

Back

Increase in Asset --> Debit Building a/c

Increase in Liability --> Credit Loan a/c

Front

Paid back to creditors by cash

Back

1. Decrease in Liability --> Debit Creditor a/c

Decrease in Asset --> Credit Cash a/c

Front

Return damaged goods to supplier on credit

Back

1. Decrease in Liability --> Debit Creditor a/c

2. Increase in Revenue --> Credit Return Outwards a/c

3. Note: Refund from supplier is deemed as a revenue

Front

Purchased computer on credit from XY Co.

Back

Increase in Asset --> Debit Computer a/c

Increase in Liability --> Credit Creditor a/c (XY Co.)

Front

Sold goods and received cash immediately

Back

Increase in Asset --> Debit Cash a/c

Increase in Revenue --> Credit Sales a/c

Front

Paid salaries to worker

Back

Increase in Expense --> Debit Salary a/c

• Decrease in Asset --> Credit Cash or Bank a/c