Basic Accounting – debits & credits

by fundsacademy.com

What is double entry bookkeeping?

• When a financial transaction is booked there are two sides to the entry: a debit and a credit

• The accounting equation must be maintained when posting journal entries

What is the accounting equation?

Assets = Liabilities + Owners Equity

There are five categories of accounts:

• Asset

• Liabilities

• Equity

• Revenue

• Expense

When should I debit or credit?

• First decide which category the account falls into

• Secondly depending on whether you want to increase or decrease you can use the following table

Do I debit or credit?

Now take a read of below article before finally taking the quiz!

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