Increase / Decrease In Owner's Equity Debit Or Credit

Decrease In Owner's Equity Debit Or Credit

Decrease in Owner’s Equity is debited as decrease in owner’s equity is unusual for such type of account.

The normal, usual, favorable or positive balance for owner’s equity account is credit but unusual, unfavorable or negative balance is debit.

When owner’s equity increases, we credit it and when it decreases, we debit it according to the Rules of Debit And Credit.

Owner’s equity increases with increase in every revenue account and decrease with every increase in expense account as revenue increases with every credit amount and expense increases with every debit amount.

Increase In Owner’s Equity Debit Or Credit

Increase in owner’s equity is credited as with every increase in owner’s equity account, it is credited which is a favorable, positive, usual balance for owner’s equity account.

For example, owner’s equity account is increased by Rs. 5000 when the revenue account of Rs. 5000 is earned by the business.