Debit and Credit Rules

1. Rule of Debit and Credit for Expenses

Expenses would be debited in case of increase and credited for decrease. for example an repair expenditure of $ 2000 would be recorded in books of accounts as under

 Repair  A/C   2000 Dr
Cash     A/C  2000 Cr

2. Rule of Debit and credit for asset

Rule for debit and credit in case of assets is similar to those are for expenses i.e increase in asset would be debited and decrease in asset would be credited. for example Mr. A Purchases  Furniture for 2,000/- on cash would be recorded in books of accounts as under

Furniture A/c  2,000  (Debit)
Cash A/c         2,000 (Credit)

3.Rule of Debit and Credit for Income

Income would be credited for an increase in income and will be debited in case of decrease.for example Rent receive of 2000 in cash would be recorded in books of accounts as under.

Cash A/c $  2000  (Debit)

Rent  A/c $ 2000  (Credit)

4.Rule of Debit and credit for Liabilities and equity

Rule of debit and credit for liability and equity is similar to those for income i.e increase in liability will be credited and decrease in liability will be debited.