Why Are Increases Or Decreases In Assets Recorded As Debits Or Credits

Increase And Decrease In Assets Accounts Recorded As Debits Or Credits

According to the Rules of Debit And Credit, an increase in assets account resulted in the debit to assets accounts as Assets usually has debit balance which is also called positive, favorable or normal balance.

Any decrease in assets accounts resulted in the credit to assets account as with the decrease in assets accounts, these are recorded on credit side in the ledger account. Also, since the assets account has credit balance which is unusual or unfavorable or negative balance for it due to the Disposal of Assets or any other reasons.