Basic Accounting - Debits and Credits

In general, the following is a good rule of thumb:

1.      Debits: (On the left, Dr), anything which leads to cash flowing out of the business (or cash increase which matches a credit).

2.      Credits: (On the right, Cr), anything which leads to cash flowing in the business (or cash decrease which matches a debit).

These are usually recorded discretely so that any new transactions work income or balance sheet wise:

Debits (Dr)

Credits (Cr)

Assets (+)

Assets (-)

Liabilities (-)

Liabilities (+)

Equity (-)

Equity (+)

Expenses (+)

Revenue (+)

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