within the accounting system the concept of double entry bookkeeping whereby every accounting transaction affects at least two accounts.

1. WHAT IS DEBIT & CREDIT
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2. Debit - Credit
 Within the accounting system the concept of double entry
bookkeeping whereby every accounting transaction affects at least two
accounts.
 The entry recorded on the left is known as the “debit” and the entry
recorded on the right is known as the “credit”.
 The debit entry can increase an asset or expense and decrease an
income or liability account whereas a credit can decrease an asset or
expense account and increase an income or liability account.

3. Rules that govern the use of debits and credits
Within the accounting process there are rules that govern to use of debits and credits
 Accounts with a debit balance increase when a debit entry is added
 Accounts with a credit balance increase when a credit entry is added
 The total rupee value of all debits must equal the total rupee value of all credits

4. The most common accounts
The most common accounts where debits and credits are applied are as follows:
 Sales – debit accounts receivable & credit sales
 Sales Invoice Paid – debit bank & credit accounts receivable
 Cash Sales – debit bank & credit sales
 Cash Purchase – debit expense account & credit bank
 Bank Loan – debit bank & credit loan payable
 Repay a Loan – debit loan payable & credit bank
 Pay employees – debit wage expense & credit bank
 Bank Interest – debit interest expense & credit bank