View Full Version : Credits and debits
ntxawm_2008
Nov 3, 2008, 06:10 PM
I am not understanding which items to put under credits and which goes under debits.
i.e. cash, accounts receivable, accts payable, rental revenue, supplies expense, etc.
I do not understand which items go under which statement. i.e. adjustments, income statement,etc.
:(
pready
Nov 3, 2008, 06:19 PM
Assets and Expenses have a normal Debit Balance. Assets are on the Balance Sheet.
Expenses are on the Income Statement.
Liabilities, Owner's Equity, and revenues have a normal Credit balance. Liabilities and Owner's Equity are on the Balance Sheet. Revenues are on the Income Statement.
Adjusting entries are shown on a worksheet and jounalized in the General Journal. They do not appear on the Financial Statements because they are a transaction.
ROLCAM
Jan 25, 2009, 05:11 AM
DEBITS = ALL ASSETS + ALL EXPENSES
CREDITS = ALL LIABILITIES + ALL INCOMES
FORMULA = A + E = L + I
Please remember this for ever.
You will never go wrong again.
pready
Jan 25, 2009, 04:19 PM
Adjustments affect one Balance sheet account and one Income Statement account.
Example for Supplies used during the period.
Debit Supplies Expense - Income Statement Account
Credit Supplies - Balance Sheet Account