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Debits and credits are an integral part of the accounting system. They are the method used to record business transactions, and keep track of assets and liabilities. Anything that has a monetary value is recorded as a debit or credit, depending on the transaction taking place. The concept of debits and credits may seem foreign, but the average person uses the concept behind the terms on a daily basis. In accounting, debits or credits are abbreviated as DR and CR respectively.
In Personal accounts:Debit the receiver,Credit the giver
In Real accounts or asset accounts:Debit what comes in,Credit what goes out
In Nominal accounts:Debit all expenses & losses,Credit all incomes & Gains
identify the item and transaction nature
03 accounts Personel/real/Nominal
Personel Dr-REceiver/Cr-Giver
Real- Dr-Comes in/Cr-goes out
Nominal-Dr-Exp or loss Cr-Income
DEBIT WHAT COMES IN AND CREDIT WHXT GOES OUT UNDER DOUBLE ENTRY SYSTEM OF ACCOUNTING
