Sunday 15 January 2012

FUN WITH ACCOUNT

RULES OF DOUBLE ENTRY CONCEPT
Based on the duality, the rules of double entry bookkeeping can now be stated as follows:
Asset accounts are increased by debiting and decreased by crediting the T-account.  Therefore asset accounts in general will have debit balances, if a value exists.

Liabilities and owner’s equity accounts are increased by crediting and decreased by debiting the T-accounts.  Thus, liability and owner’s equity accounts generally will have credit balances.

Expense accounts are increased by debiting and decreased by crediting the accounts.  On the other hand, revenue accounts are increased by crediting and decreased by debiting the account concerned.  In general, expense accounts have debit balances while revenue accounts have credit balances.



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