{"id":1771,"date":"2015-07-17T12:48:53","date_gmt":"2015-07-17T12:48:53","guid":{"rendered":"https:\/\/courses.candelalearning.com\/finaccountingxmaster\/?post_type=chapter&#038;p=1771"},"modified":"2015-07-19T13:15:11","modified_gmt":"2015-07-19T13:15:11","slug":"debit-and-credit-review","status":"publish","type":"chapter","link":"https:\/\/courses.lumenlearning.com\/clinton-finaccounting\/chapter\/debit-and-credit-review\/","title":{"raw":"Debit and Credit Review","rendered":"Debit and Credit Review"},"content":{"raw":"<h1 class=\"title\">Four steps to determine what to debit or\u00a0credit<\/h1>\r\n<p class=\"post-meta\">Here is a handy list of questions to help guide students through the thought process involved with determining what to debit or credit in a given transaction. \u00a0(Click <a href=\"https:\/\/dl.dropboxusercontent.com\/u\/6751559\/debit-credit-decisions.pdf\" target=\"_blank\">pdf <\/a>format for a printable version.)<\/p>\r\n\r\n<div class=\"entry\">\r\n\r\n<b>Step 1<\/b>: \u00a0Pick ONE account that is affected by this transaction\r\n\r\n<b>Step 2<\/b>: \u00a0Is this account you picked in Step 1 INCREASING or DECREASING?\r\n\r\n<b>Step 3<\/b>: \u00a0What type of account is this?\r\n\r\nCHOICES\r\n<ul>\r\n\t<li><b>Assets<\/b> \u2013 something that has future economic benefit \u2013 Cash, Accounts Receivable, Inventory, Prepaid Insurance, Equipment, etc.<\/li>\r\n\t<li><b>Liabilities<\/b> \u2013 a debt owed to others \u2013 Accounts Payable, Unearned Revenue, Notes Payable, Bonds Payable, Long-term Mortgage Payable<\/li>\r\n\t<li><b>Equity<\/b> \u2013 Common Stock, Retained Earnings<\/li>\r\n\t<li><b>Revenues<\/b> \u2013 Sales Revenue, Service Revenue, Sales<\/li>\r\n\t<li><b>Expenses<\/b> \u2013 Cost of Goods Sold, Salaries Expense, Insurance Expense<\/li>\r\n\t<li><b>Dividends<\/b> \u2013 these are dividends that the company has declared and has, or will, pay to its stockholders<\/li>\r\n<\/ul>\r\n<b>Step 4<\/b>:\u00a0 Combine your answer from Step 2 and Step 3 to find whether you DEBIT or CREDIT the account you identified in Step 1\r\n<table border=\"1\" cellspacing=\"0\" cellpadding=\"0\" align=\"left\">\r\n<tbody>\r\n<tr>\r\n<td valign=\"top\" width=\"160\"><b>Type of account<\/b><\/td>\r\n<td valign=\"top\" width=\"160\"><b>How to INCREASE<\/b><\/td>\r\n<td valign=\"top\" width=\"160\"><b>How to DECREASE<\/b><\/td>\r\n<\/tr>\r\n<tr class=\"alt-table-row\">\r\n<td valign=\"top\" width=\"160\">Assets<\/td>\r\n<td valign=\"top\" width=\"160\">Debit<\/td>\r\n<td valign=\"top\" width=\"160\">Credit<\/td>\r\n<\/tr>\r\n<tr>\r\n<td valign=\"top\" width=\"160\">Liabilities<\/td>\r\n<td valign=\"top\" width=\"160\">Credit<\/td>\r\n<td valign=\"top\" width=\"160\">Debit<\/td>\r\n<\/tr>\r\n<tr class=\"alt-table-row\">\r\n<td valign=\"top\" width=\"160\">Equity<\/td>\r\n<td valign=\"top\" width=\"160\">Credit<\/td>\r\n<td valign=\"top\" width=\"160\">Debit<\/td>\r\n<\/tr>\r\n<tr>\r\n<td valign=\"top\" width=\"160\">Revenues<\/td>\r\n<td valign=\"top\" width=\"160\">Credit<\/td>\r\n<td valign=\"top\" width=\"160\">Debit<\/td>\r\n<\/tr>\r\n<tr class=\"alt-table-row\">\r\n<td valign=\"top\" width=\"160\">Expenses<\/td>\r\n<td valign=\"top\" width=\"160\">Debit<\/td>\r\n<td valign=\"top\" width=\"160\">Credit<\/td>\r\n<\/tr>\r\n<tr>\r\n<td valign=\"top\" width=\"160\">Dividends<\/td>\r\n<td valign=\"top\" width=\"160\">Debit<\/td>\r\n<td valign=\"top\" width=\"160\">Credit<\/td>\r\n<\/tr>\r\n<\/tbody>\r\n<\/table>\r\nRepeat Steps 1 through 4 for the OTHER account in this transaction\r\n\r\nRemember:\r\n<ul>\r\n\t<li>Total debits in a journal entry (transaction) must equal the total credits in that transaction<\/li>\r\n\t<li>You need at least one debit and one credit for every journal entry<\/li>\r\n\t<li>Debits are on the left, credits are on the right<\/li>\r\n<\/ul>\r\n<\/div>","rendered":"<h1 class=\"title\">Four steps to determine what to debit or\u00a0credit<\/h1>\n<p class=\"post-meta\">Here is a handy list of questions to help guide students through the thought process involved with determining what to debit or credit in a given transaction. \u00a0(Click <a href=\"https:\/\/dl.dropboxusercontent.com\/u\/6751559\/debit-credit-decisions.pdf\" target=\"_blank\">pdf <\/a>format for a printable version.)<\/p>\n<div class=\"entry\">\n<p><b>Step 1<\/b>: \u00a0Pick ONE account that is affected by this transaction<\/p>\n<p><b>Step 2<\/b>: \u00a0Is this account you picked in Step 1 INCREASING or DECREASING?<\/p>\n<p><b>Step 3<\/b>: \u00a0What type of account is this?<\/p>\n<p>CHOICES<\/p>\n<ul>\n<li><b>Assets<\/b> \u2013 something that has future economic benefit \u2013 Cash, Accounts Receivable, Inventory, Prepaid Insurance, Equipment, etc.<\/li>\n<li><b>Liabilities<\/b> \u2013 a debt owed to others \u2013 Accounts Payable, Unearned Revenue, Notes Payable, Bonds Payable, Long-term Mortgage Payable<\/li>\n<li><b>Equity<\/b> \u2013 Common Stock, Retained Earnings<\/li>\n<li><b>Revenues<\/b> \u2013 Sales Revenue, Service Revenue, Sales<\/li>\n<li><b>Expenses<\/b> \u2013 Cost of Goods Sold, Salaries Expense, Insurance Expense<\/li>\n<li><b>Dividends<\/b> \u2013 these are dividends that the company has declared and has, or will, pay to its stockholders<\/li>\n<\/ul>\n<p><b>Step 4<\/b>:\u00a0 Combine your answer from Step 2 and Step 3 to find whether you DEBIT or CREDIT the account you identified in Step 1<\/p>\n<table cellpadding=\"0\" style=\"border-spacing: 0px; text-align: left;\">\n<tbody>\n<tr>\n<td valign=\"top\" style=\"width: 160px;\"><b>Type of account<\/b><\/td>\n<td valign=\"top\" style=\"width: 160px;\"><b>How to INCREASE<\/b><\/td>\n<td valign=\"top\" style=\"width: 160px;\"><b>How to DECREASE<\/b><\/td>\n<\/tr>\n<tr class=\"alt-table-row\">\n<td valign=\"top\" style=\"width: 160px;\">Assets<\/td>\n<td valign=\"top\" style=\"width: 160px;\">Debit<\/td>\n<td valign=\"top\" style=\"width: 160px;\">Credit<\/td>\n<\/tr>\n<tr>\n<td valign=\"top\" style=\"width: 160px;\">Liabilities<\/td>\n<td valign=\"top\" style=\"width: 160px;\">Credit<\/td>\n<td valign=\"top\" style=\"width: 160px;\">Debit<\/td>\n<\/tr>\n<tr class=\"alt-table-row\">\n<td valign=\"top\" style=\"width: 160px;\">Equity<\/td>\n<td valign=\"top\" style=\"width: 160px;\">Credit<\/td>\n<td valign=\"top\" style=\"width: 160px;\">Debit<\/td>\n<\/tr>\n<tr>\n<td valign=\"top\" style=\"width: 160px;\">Revenues<\/td>\n<td valign=\"top\" style=\"width: 160px;\">Credit<\/td>\n<td valign=\"top\" style=\"width: 160px;\">Debit<\/td>\n<\/tr>\n<tr class=\"alt-table-row\">\n<td valign=\"top\" style=\"width: 160px;\">Expenses<\/td>\n<td valign=\"top\" style=\"width: 160px;\">Debit<\/td>\n<td valign=\"top\" style=\"width: 160px;\">Credit<\/td>\n<\/tr>\n<tr>\n<td valign=\"top\" style=\"width: 160px;\">Dividends<\/td>\n<td valign=\"top\" style=\"width: 160px;\">Debit<\/td>\n<td valign=\"top\" style=\"width: 160px;\">Credit<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<p>Repeat Steps 1 through 4 for the OTHER account in this transaction<\/p>\n<p>Remember:<\/p>\n<ul>\n<li>Total debits in a journal entry (transaction) must equal the total credits in that transaction<\/li>\n<li>You need at least one debit and one credit for every journal entry<\/li>\n<li>Debits are on the left, credits are on the right<\/li>\n<\/ul>\n<\/div>\n\n\t\t\t <section class=\"citations-section\" role=\"contentinfo\">\n\t\t\t <h3>Candela Citations<\/h3>\n\t\t\t\t\t <div>\n\t\t\t\t\t\t <div id=\"citation-list-1771\">\n\t\t\t\t\t\t\t <div class=\"licensing\"><div class=\"license-attribution-dropdown-subheading\">CC licensed content, Shared previously<\/div><ul class=\"citation-list\"><li>Student handout: Four steps to determine what to debit or credit. <strong>Authored by<\/strong>:  Dr. Wendy Tietz, CPA, CMA, CGMA. <strong>Located at<\/strong>: <a target=\"_blank\" href=\"http:\/\/accountingintheheadlines.com\">http:\/\/accountingintheheadlines.com<\/a>. <strong>License<\/strong>: <em><a target=\"_blank\" rel=\"license\" href=\"https:\/\/creativecommons.org\/licenses\/by-nc\/4.0\/\">CC BY-NC: Attribution-NonCommercial<\/a><\/em><\/li><\/ul><\/div>\n\t\t\t\t\t\t <\/div>\n\t\t\t\t\t <\/div>\n\t\t\t <\/section>","protected":false},"author":1195,"menu_order":14,"template":"","meta":{"_candela_citation":"[{\"type\":\"cc\",\"description\":\"Student handout: Four steps to determine what to debit or credit\",\"author\":\" Dr. Wendy Tietz, CPA, CMA, CGMA\",\"organization\":\"\",\"url\":\"http:\/\/accountingintheheadlines.com\",\"project\":\"\",\"license\":\"cc-by-nc\",\"license_terms\":\"\"}]","CANDELA_OUTCOMES_GUID":"","pb_show_title":"on","pb_short_title":"","pb_subtitle":"","pb_authors":[],"pb_section_license":""},"chapter-type":[],"contributor":[],"license":[],"class_list":["post-1771","chapter","type-chapter","status-publish","hentry"],"part":56,"_links":{"self":[{"href":"https:\/\/courses.lumenlearning.com\/clinton-finaccounting\/wp-json\/pressbooks\/v2\/chapters\/1771","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/courses.lumenlearning.com\/clinton-finaccounting\/wp-json\/pressbooks\/v2\/chapters"}],"about":[{"href":"https:\/\/courses.lumenlearning.com\/clinton-finaccounting\/wp-json\/wp\/v2\/types\/chapter"}],"author":[{"embeddable":true,"href":"https:\/\/courses.lumenlearning.com\/clinton-finaccounting\/wp-json\/wp\/v2\/users\/1195"}],"version-history":[{"count":3,"href":"https:\/\/courses.lumenlearning.com\/clinton-finaccounting\/wp-json\/pressbooks\/v2\/chapters\/1771\/revisions"}],"predecessor-version":[{"id":1890,"href":"https:\/\/courses.lumenlearning.com\/clinton-finaccounting\/wp-json\/pressbooks\/v2\/chapters\/1771\/revisions\/1890"}],"part":[{"href":"https:\/\/courses.lumenlearning.com\/clinton-finaccounting\/wp-json\/pressbooks\/v2\/parts\/56"}],"metadata":[{"href":"https:\/\/courses.lumenlearning.com\/clinton-finaccounting\/wp-json\/pressbooks\/v2\/chapters\/1771\/metadata\/"}],"wp:attachment":[{"href":"https:\/\/courses.lumenlearning.com\/clinton-finaccounting\/wp-json\/wp\/v2\/media?parent=1771"}],"wp:term":[{"taxonomy":"chapter-type","embeddable":true,"href":"https:\/\/courses.lumenlearning.com\/clinton-finaccounting\/wp-json\/pressbooks\/v2\/chapter-type?post=1771"},{"taxonomy":"contributor","embeddable":true,"href":"https:\/\/courses.lumenlearning.com\/clinton-finaccounting\/wp-json\/wp\/v2\/contributor?post=1771"},{"taxonomy":"license","embeddable":true,"href":"https:\/\/courses.lumenlearning.com\/clinton-finaccounting\/wp-json\/wp\/v2\/license?post=1771"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}