Debit & Credit Rules for Basic Accounting Elements
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Table of Content:
📘 General Journal Entries (Basic Accounting Elements)
| Element | Transaction Example | Journal Entry | Explanation |
|---|---|---|---|
| Assets | Purchased Machinery for $10,000 in Cash | Machinery A/c Dr. 10,000 To Cash A/c Cr. 10,000 |
Machinery (Asset ↑ → Debit), Cash (Asset ↓ → Credit) |
| Liabilities | Took Bank Loan $5,000 | Cash A/c Dr. 5,000 To Bank Loan A/c Cr. 5,000 |
Cash (Asset ↑ → Debit), Loan (Liability ↑ → Credit) |
| Equity (Capital) | Owner invested $20,000 Cash | Cash A/c Dr. 20,000 To Capital A/c Cr. 20,000 |
Cash (Asset ↑ → Debit), Capital (Equity ↑ → Credit) |
| Revenue / Income | Earned Service Revenue $2,000 in Cash | Cash A/c Dr. 2,000 To Service Revenue A/c Cr. 2,000 |
Cash (Asset ↑ → Debit), Revenue (Income ↑ → Credit) |
| Expenses / Losses | Paid Rent $1,000 | Rent Expense A/c Dr. 1,000 To Cash A/c Cr. 1,000 |
Rent (Expense ↑ → Debit), Cash (Asset ↓ → Credit) |
🔹 Quick Rules Recap
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Assets → Debit increase, Credit decrease
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Liabilities → Debit decrease, Credit increase
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Equity (Capital) → Debit decrease, Credit increase
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Revenue → Debit decrease, Credit increase
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Expenses → Debit increase, Credit decrease
✅ This table covers all basic elements with journal entries.