Business Q&A

Question:
When workingwith a ledger I dont always know when to post a debit or if its a credit

Answer:
In the actual ACCOUNTING world, a debit is entered on the right side of a ledger and a credit is entered to the left. Also, remember the accounting equation, Assets = Liabilities + Owners' Equity. Assets are generally debited to increase the value and credited to decrease the value. Liabilites and Owners' Equity are the opposite. Expenses are debited whereas revenue is credited (to increase values).

The easiest way to remember it is ALOE REX and DCCCD (aloe rex and “d triple cd”)

Here's the model for that:

A L OE R EX
l l l l l
D C C C D

In case you can't tell:
A = asset
L = liability
OE = owners' equity
R = revenue
EX = expense

Now, if you're talking about a check register…. it's the total opposite. A debit decreases cash and a credit increases cash. The bank prints all of the check registers to match THEIR ledgers. In other words, when you spend money, it decreases their liability to you. When you add money it increases their liability.

Hopefully that makes sense…..

Resource related business question and answer:

We want to know manufacturer of glass & PE bottle in GERMANY ...

Small business,such as local business,personal ... businesses in USA , y r they so successful? How to differentiate between debits and credits when working on fianancial statements? ...

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