Learn Accounting by DEBITS & CREDITS - No mistake in double entry

It is often said that if you have learnt the basic rules of DEBITS and CREDITS, accounting is no more difficult. I am writing this to make the most confusing topic easy for you.

Remember there are 5 elements of Financial Statements, these are;

1. Assets
2. Liabilities
3. Capital
4. Expenses
5. Income

Remember these rules and you will be the Winner!

Asset :  Increase in  Asset >>> Debit
            Decrease in Asset >>> Credit

If you have purchased a property by paying cash of $100,000, then it means You have in fact made an increase in your asset by corresponding decrease in asset i.e cash.

Entry would be:
   Property Dr
   Cash       Cr

Liabilities:   Opposite of Assets

    Increase >>>>Cr
    Decrease>>>>Dr

If you have taken a loan of $100,000 for paying to supplier. Means you have increased your bank liability for decreasing liability towards supplier

Entry would be:
   
     Supplier Account >>>> Dr
     Bank Loan>>>>>>>>> Cr

Capital:   Same as Liabilities


Expenses:   Same as Assets

Income:    Same as Liabilities/ Capital

Conclusion: Just remember two scenarios

1) Assets & Expenses >>>>>>>>>>Same Treatment
2) Liability, Capital and Income >>>Same Treatment



Be confident! you will never make an error in double entry. Best of Luck!