Debits and Credits

We have received a number of questions regarding debits, credits and how to use them. The guide below will help you with the general rules for debits and credits

Profit & Loss Accounts -

To increase an income account you credit it.
To decrease an income account you debit it.
To increase an expense account you debit it.
To decrease an expense account you credit it.

For example, to record a bank fee for the month, DR bank fee expense, CR bank account.

Balance Sheet Accounts

Asset accounts - to increase you debit, to decrease you credit.
Liability accounts - to increase you credit, to decrease you debit.

For example, to record depreciation for the month, DR depreciation expense in the profit and loss accounts, CR accumulated depreciation in the balance sheet.