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Modern or Golden Rules Rules of debit and credit

Following are the rules of debit and credit:

*      Assets

When Assets increase then Dr.

When Assets decreases then Cr.

Purchase Building for Cash $ 10000

Here Building (Assets) increase so Dr Building Account and Cash (Assists) decrease so Cr Cash Account Cr.  

*      Expenses

When expenses increase then Dr.

When expenses decrease then Cr.

We can say that

  • When Assets and Expense increase they are debited (Dr.) and when decrease they are credited. (Cr.)

 

*      Liabilities

When liabilities increase then Cr.

When liabilities decrease then Dr.

 

*      Capital / Owner’s equity

When Capital / Owner’s equity increase then Cr.

When Capital / Owner’s equity decrease then Dr.

*      Revenues

 

When Revenues increase then Cr.

When Revenues decrease then Dr.

We can say that

  • When liabilities, capital and revenues increase they then Cr. and when they decrease then Dr.

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