Recording of Transactions-I

“Increase in asset is debited, and decrease in asset is credited.” “Increase in expenses/losses is debited, and decrease in expenses/ For recording changes in Liabilities and Capital/Revenues (Gains): “ Increase in liabilities is credited and decrease in liabilities is debited.” “ Increase in capital is credited and decrease in capital is debited.” (iii) “ Increase in revenue/gain is credited and decrease in revenue/gain The rules applicable to the different kinds of accounts have been summarised in the following chart: Rules of Debit and Credit Asset (Increase) (Decrease) + – Debit Credit (Decrease) (Increase) – + Debit Credit Revenues/Gains (Decrease) (Increase) – + Debit Credit Liabilities (Decrease) (Increase) – + Debit Credit Expenses/Losses (Increase) (Decrease) + – Debit Credit The transactions in Example on page will help you to learn how to apply these debit and credit rules. Observe the analysis table given on page carefully to be sure that you understand before you go on to the next one. To