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.