Revision on Debit and Credit concepts

Purchase a new van for business use with cheque

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

• Credit (Increase) in Asset (Vehicle a/c)

• Debit (Decrease) in Asset (Bank a/c)

• Credit (Decrease) in Asset (Vehicle a/c)

Owner brought in furniture to use in business

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

• Credit (Decrease) in Asset (Furniture a/c)

• Debit (Increase) in Liability (Furniture a/c)

• Credit (Increase) in Revenue (Furniture a/c)

Paid salaries to worker

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

• Credit (Increase) in Liability (Salary Payable a/c)

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

• Credit (Decrease) in Equity (Owner's Capital a/c)

Owner took business cash for personal use

• Debit (Increase) in Drawings a/c

• Credit (Increase) in Asset (Cash a/c)

• Debit (Decrease) in Owner's Equity

• Credit (Decrease) in Drawings a/c

Purchased new factory building with bank loan

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

• Credit (Decrease) in Asset (Building a/c)

• Debit (Increase) in Liability (Loan a/c)

• Credit (Increase) in Equity (Owner's a/c)

Purchased computer on credit

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

• Credit (Decrease) in Asset (Computer a/c)

• Debit (Increase) in Expense (Computer a/c)

• Credit (Increase) in Revenue (Computer a/c)

Paid creditors by cash

Sell goods and received cash immediately

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

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

• Debit (Decrease) in Liability (Cash a/c)

• Credit (Increase) in Expense (Sales a/c)

Debtors paid back to business with cheques

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

• Credit (Increase) in Asset (Bank a/c)

• Debit (Decrease) in Asset (Debtor a/c)

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

Return damaged goods to supplier on credit

• Debit (Decrease) in Liability (Creditor a/c)

• Credit (Increase) in Return Outwards a/c

• Debit (Increase) in Asset (Inventory a/c)

• Credit (Decrease) in Expense (Cost of Goods Sold a/c)