Fundamental Rules of Debit & Credit! 🏆
Your journey to accounting mastery starts here. Let's make it simple, fun, and unforgettable!
What Are Debit & Credit Rules? 🤔
Think of debit and credit rules as the GPS of accounting! Just like GPS tells you which direction to turn, these rules tell you which side of an account to record transactions.
The Accounting Equation Foundation
Every transaction has TWO sides - just like a coin! This is called the "dual aspect" of accounting. When one account increases, another must decrease (or increase on the opposite side).
Assets are things your business OWNS - like cash, buildings, equipment, or inventory.
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Buying a computer for Rs 1,000:
• Debit Computer Equipment Rs 1,000 (Asset increased!)
• Credit Cash Rs 1,000 (Asset decreased!)
Liabilities are what your business OWES - like loans, bills to pay, or credit card debt.
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Taking a business loan of Rs 5,000:
• Debit Cash Rs 5,000 (Asset increased!)
• Credit Bank Loan Rs 5,000 (Liability increased!)
Capital is the owner's investment in the business - like initial money put in or profits kept in the business.
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Owner invests Rs 10,000 in the business:
• Debit Cash Rs 10,000 (Asset increased!)
• Credit Owner's Capital Rs 10,000 (Capital increased!)
Income is money your business EARNS - like sales, service fees, or interest earned.
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Making a sale for Rs 500:
• Debit Cash Rs 500 (Asset increased!)
• Credit Sales Revenue Rs 500 (Income increased!)
Expenses are costs your business PAYS - like rent, salaries, electricity, or supplies.
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Paying office rent of Rs 800:
• Debit Rent Expense Rs 800 (Expense increased!)
• Credit Cash Rs 800 (Asset decreased!)
Basic Rules of Accounting - Quick Reference 🎯
ASSETS
⬆️ Debit | ⬇️ Credit
LIABILITIES
⬇️ Debit | ⬆️ Credit
CAPITAL
⬇️ Debit | ⬆️ Credit
INCOME
⬇️ Debit | ⬆️ Credit
EXPENSES
⬆️ Debit | ⬇️ Credit
🎮 Interactive Practice Demo
Click the buttons below to see the rules in action!
👆 Click any button above to see a practical example!
You're Ready to Rock Accounting! 🚀
Key Takeaways:
✅ Every transaction affects TWO accounts
✅ Total debits always equal total credits
✅ Assets & Expenses increase with debits
✅ Liabilities, Capital & Income increase with credits
✅ Practice makes perfect - keep applying these rules!
Happy Accounting! You've got this! 💪😊