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the problem between the debit and credit

Cchoy11y ago
I am CAT student and i am confusing in the topic MA1 management information of double-entry bookeeping. May i ask how to identify debit and credit?
Mmansoor11y ago#1
its easy: assets: dr + , cr - expenses: dr+, cr- equity: dr-, cr+ liability: dr-, cr+ revenue: dr-, cr+ hope this helps
Cchoy11y ago#2
if the question asking me what would be the double-entry for payment of an mount owing to a supplier,how can i identify the debit and credit?
Mmansoor11y ago#3
good question. this is where u need to analyse the transaction. so.. u r paying money to a supplier to whome u owe money. this means u bought goods from him on credit. so.. initially when u bought the goods on credit, u did 2 things: 1. increased you liability - which means u CREDITED your supplier 2. you increased your ASSETS (PURCHASES) - Which means u DEBITED. NOW, when u r paying the supplier, what is happening? 1. you r decreasing ur liability - which means you will DEBIT the supplier 2. you are decreasing your asset, in this case, CASH. THUS U WILL credit the cash. your payment entry will be: Dr Supplier Cr Cash/Bank --------------------------------- always study the the given transaction and try to identify which type of account (asset, expense, equity, liability, revenue) is being affected, then see if these accounts r being increased or decreased by the transaction, then simply apply the rules i wrote above. its a bit difficult in thhe beginning but soon it will become second nature. good luck..:)
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