Let us see, the affect on debit and credit, when there is an increase or decrease in assets or liabilities...
From the above picture it can be understood that
- Increase in the Assets are debits;decrease in credits.
- Increase in liabilities are credits; decrease in debits.
- Increase in owner's capital are credits; decrease in debits.
- Increase in expense/losses are debits; decrease in credits.
- Increase in revenue/income are credits; decrease in debits.
It should be noted that an increase in assets is favorable to the firm, but an increase in expenses is no so, even though, in both cases, the increase will be recorded on the debit side. Similarly, an increase in liabilities is not favorable, but an increase in revenue is, both will be recorded on the credit side.
thnx for the help...
ReplyDeleteThank you for visiting my blog.
ReplyDeleteYour examples and simple explanations are really very helpful! Thank you Lasya
ReplyDeleteThank you Anonymous. I would be very happy if you would have commented with your name.
ReplyDeleteGood job Lasya, can we Have your qualification, My name is Rajendra
ReplyDeleteThank you Rajendra garu.
DeleteCan i get a explanation of what debit and credit balance means in case of either personal real or nominal account
ReplyDeleteFor example - debit balance of personal account means our debtors
But i want it all in explanation given examples n making journal and ledger.
i wud be oblidged if i get this avour of urs plz
Definitely anonymous. I will update about this as soon as possible. You can reach me at lasyaramakrishna@gmail.com
ReplyDelete