Rules of Debit And Credit
The rules of Debit and Credit are the Fundamental or basic Accounting Principles for a Business Transaction under Double Entry System . When an account increases or decreases, we debit it or credit it depending upon the Types / Kinds of Accounts . You Can Also Study, “ What is the Difference Between Debit And Credit ” Rules of Debit And Credit For Assets, Liabilities, Capital or Ow ner's Equity or Equity, Revenues or Income, Gains and Expenses, Losses As there are five types of accounts, so debit and credit rules affect on accounts differently. We will discuss about three main rules in below section. 1. First Rule, According To Characteristics of Accounts 1. For Assets , the N ormal Balance is Debit and Unfavourable Balance is Credit. At the end of Accounting Period, assets are transferred to Balance Sheet or Statement of Financial Position . Assets Increase = Debit Assets Decrease = Credit 2. For Liabilities ,...