Credits and debits

[Bubblygirl]

Please can someone confirm in simple terms the difference from credits and debits?

[roy ramphul]

A Credit is an increase in revenue & Liability and a decrease in asset and expense.

A Debit is an increase in expense and asset and a decrease in in reveune and liability.

[Lei Zhou]

A Credit is an increase in revenue, liability & EQUITY, and a decrease in asset and expense.

A Debit is an increase in expense and asset and a decrease in in reveune, liability & EQUITY.

[Rose_20]

Hi!

Is'nt it just like this, the money coming into the business is a Debit entry (Increase in Assets) e.g Stock. The money going out is a Credit entry. (Increase in Liabilities, (Borrowings) e.g rent. etc.

Hope im right.

:001_unsure:

[Devilishbird]

The best way I was ever taught how to remember these was:

AED =
Asset, Expense, Drawings (D stands for Debit)

LIC =
Liabilities, Income, Capital (C stands for Credit)

Remember first AED which sits on the left side of the TB and LIC sits on the right side. Then you will not get your Debits and Credits mixed up,

Hope that helps you
:001_smile:

[Mathew_Hill]

We always got taught to use PEARLS. Please see below:

Debits
Purchases
Expenses
Assets

Credits
Revenues
Liabilities
Sales.

That always really helped me.

Matt

[A-Vic]

(D)Purchase Expence Assits (credit)Revenue Liability Sales


now enter that in a t account or trial balance works every time

Vic :001_smile:

PEA/RLS

[Charli]

Hi

have a look at the e-learning lessons on here. they are really good for explaining debts and credits. They helped me loads.

:001_smile: