Which is true?
Debits increase assets and increase liabilities
Credits decrease assets and decrease liabilities
Credits decrease assets and increase liabilities
Debits decrease liabilities and decrease assets
:confused:

Credits decrease assets and increase liabilities

The ledger of Elburn Company at the end of the current year shows Accounts Receivable
$110,000, Sales $840,000, and Sales Returns and Allowances $28,000.
Instructions
(a) If Elburn uses the direct write-off method to account for uncollectible accounts, journalize
The adjusting entry at December 31, assuming Elburn determines that Copp’s $1,400 balance
Is uncollectible.
(b) If Allowance for Doubtful Accounts has a credit balance of $2,100 in the trial balance, journalize
The adjusting entry at December 31, assuming bad debts are expected to be (1) 1%
Of net sales, and (2) 10% of accounts receivable.
(c) If Allowance for Doubtful Accounts has a debit balance of $200 in the trial balance, journalize
The adjusting entry at December 31, assuming bad debts are expected to be (1) 0.75%
Of net sales and (2) 6% of accounts receivable.

The ledger of Elburn Company at the end of the current year shows Accounts Receivable
$110,000, Sales $840,000, and Sales Returns and Allowances $28,000.
Instructions
(a) If Elburn uses the direct write-off method to account for uncollectible accounts, journalize
The adjusting entry at December 31, assuming Elburn determines that Copp's $1,400 balance
Is uncollectible.
(b) If Allowance for Doubtful Accounts has a credit balance of $2,100 in the trial balance, journalize
The adjusting entry at December 31, assuming bad debts are expected to be (1) 1%
Of net sales, and (2) 10% of accounts receivable.
(c) If Allowance for Doubtful Accounts has a debit balance of $200 in the trial balance, journalize
The adjusting entry at December 31, assuming bad debts are expected to be (1) 0.75%
Of net sales and (2) 6% of accounts receivable.

Quote:

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Originally Posted by gracielou

which is true?
debits increase assets and increase liabilities
credits decrease assets and decrease liabilities
credits decrease assets and increase liabilities
debits decrease liabilities and decrease assets
:confused:

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Credits decrease assets and increase liabilities

Please remember this :-

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.

I've been very confused between the two and have spent a while trying to learn it on my own (dropped out of Acct 101 because I just couldn't get the debit and credit thing). I even read a book and still didn't get it.

These tutorials have really helped me:
- Lots of info: Bean Counter So, you want to learn Bookkeeping- Introduction

- This is a beginner's guide, plus they have a separate tutorial on a lot of sample transactions, too: Accounting: Making Sense of Debits and Credits. A great Beginner's Guide to Accounting. Understand the logic behind Accounting. This tutorial will help you understand the basics of Accounting - especially credits and debits.

Hope this helps. Good luck.

What am I doing worng??

Quote:

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Originally Posted by doddl777

What am I doing worng?????

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You do not have a previous post so I do not know what you are doing wrong.

If you post your problem on this site and what you have attempted the members here will be more than happy to help you with your problem.

If your question is related to the original question, then I have a way for you to remember which accounts have a normal debit or credit balance.

D - Debits (normal debit balance)
E - Expenses
A - Assets
D - Dividends/Drawings

C - Credits (normal credit balance)
U - Unearned Revenue
R - Revenues
L - Liabilities
S - Shareholder's Equity/Owners Capital

A debit entry for an account with a normal debit balance will increase the account balance, while a credit entry will decrease the account balance.

A credit entry for an account with a normal credit balance will increase the account balance, while a debit entry will decrease the account balance.