Debit and Credit
Rules
Debit Nature: To Increase – You need to Debit the item
To Decrease – You need to Credit the item
Credit Nature:To Increase – You need to Credit the item (Opposite to the Dr Nature Rule)
To Decrease – You need to Debit the item (Opposite to the Dr Nature Rule)
CREDIT
NATURE
A. L. O. R. E.
DEBIT
NATURE
Assets
Cash Amount of cash available to the entity. Can be in a bank account, or in hand.
Account receivable The amount owed by customers are goods or services are sold on credit.
Inventory The goods held by a retail store for sale to customers.
Supplies Items (pen, paper, stationery) held for internal use. The amount of supplies used is an expense.
Land Land controlled by the entity. Land is not subjected to depreciation.
Buildings Buildings controlled by the entity. Buildings are separately recorded from the land they are situated
on.
Vehicles The motor vehicles controlled by
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