State the rules of debit and credit for all types of accounts.

1.	State the rules of debit and credit for all types of accounts.
Answer» The term ‘debit’ is supposed to have derived from ‘debt’ and the term ‘credit’ from ‘creditable’. For convenience ‘Dr1 is used for debit and ‘Cr’ is used for credit. The effects of rules of debit and credit on various types of accounts are given as follows: 1. Increase in asset is debit and decrease in asset is credit. 2. Increase in liability is credit and decrease in liability is debit. 3. Increase in capital is credit and decrease in capital debit. 4. Increase in expenses is debit and decrease in expense is credit. 5. Increase in revenue is credit and decrease in revenue is debit.

Answer»

The term ‘debit’ is supposed to have derived from ‘debt’ and the term ‘credit’ from ‘creditable’. For convenience ‘Dr1 is used for debit and ‘Cr’ is used for credit. The effects of rules of debit and credit on various types of accounts are given as follows:

1. Increase in asset is debit and decrease in asset is credit.

2. Increase in liability is credit and decrease in liability is debit.

3. Increase in capital is credit and decrease in capital debit.

4. Increase in expenses is debit and decrease in expense is credit.

5. Increase in revenue is credit and decrease in revenue is debit.

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