Debits-Credits - BC Bookkeeping Tutorials|dwmbeancounter.com

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Debits-Credits

Introduction



Since we will be using debits and credits to record transactions in Special Journals and General Ledger Accounts, let's revisit some old definitions.
Debit -An entry in the financial books of a firm that increases an asset, draw or an expense or an entry that decreases a liability, owner’s equity (capital)  or income. Also, an entry entered on the left side (column) of a journal or general ledger account.

Let’s combine the two above definitions into one complete definition. An entry (amount) entered on the left side (column) of a journal or general ledger account that increases an asset, draw or an expense or an entry that decreases a liability, owner’s equity (capital) or revenue.

Credit – An entry in the financial books of a firm that increases a liability, owner’s equity (capital) or revenue, or an entry that decreases an asset, draw, or an expense. Also, an entry entered on the right side (column) of a journal or general ledger account.

Let’s combine the two above definitions into one complete definition. An entry (amount) entered on the right side (column) of a journal or general ledger account that increases a liability, owner’s equity (capital) or revenue, or an entry that decreases an asset, draw, or an expense.
If you run across any terms in this tutorial that you are unsure of check out the glossary that  I've provided and/or my Beginning Bookkeeping Tutorial:

Bookkeeping Glossary

Beginning Bookkeeping Tutorial


What's Next ?

Let's see what Journals are.
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