The Rule of Debit and Credit

What is the Accounting Equation?

• Asset=Liability + Equity

• Asset=Liability - Equity

• Lability=Asset - Equity

• All of the above

Answer explanation

Asset= Liability + Equity

Asset increase in

• Debit

• Credit

Answer explanation

Debit

You bought office supplies for $500 in cash.

Answer explanation

• Debit: Office Supplies $500

• Credit: Cash $500

You provided consulting services worth $1,200 on credit.

Answer explanation

• Debit: Accounts Receivable $1,200

• Credit: Service Revenue $1,200

You paid $800 for rent.

Answer explanation

• Debit: Rent Expense $800

• Credit: Cash $800

You received a loan of $10,000 from the bank.

Answer explanation

• Debit: Cash $10,000

• Credit: Loan Payable $10,000

You sold products worth $2,500. The customer paid $1,500 in cash and will pay the the remaining amount

Answer explanation

• Debit: Cash $1,500

• Debit: Accounts Receivable $1,000

• Credit: Sales Revenue $2,500

You paid $2,000 in salaries to employees.

Answer explanation

• Debit: Salaries Expense $2,000

• Credit: Cash $2,000

You purchased equipment for $3,000, paying $1,000 in cash and the remaining $2,000 on credit.

Answer explanation

• Debit: Equipment $3,000

• Credit: Cash $1,000

• Credit: Accounts Payable $2,000

You collected $600 from a customer who owed you money.

Answer explanation

• Debit: Cash $600

• Credit: Accounts Receivable $600