{"id":2997,"date":"2020-10-01T17:30:10","date_gmt":"2020-10-01T17:30:10","guid":{"rendered":"https:\/\/courses.lumenlearning.com\/wm-financialaccounting\/?post_type=chapter&#038;p=2997"},"modified":"2021-02-06T16:56:16","modified_gmt":"2021-02-06T16:56:16","slug":"rules-of-debits-and-credits","status":"publish","type":"chapter","link":"https:\/\/courses.lumenlearning.com\/suny-clinton-financialaccounting\/chapter\/rules-of-debits-and-credits\/","title":{"raw":"Rules of Debits and Credits","rendered":"Rules of Debits and Credits"},"content":{"raw":"<div class=\"textbox learning-objectives\">\r\n<h3>Learning Outcomes<\/h3>\r\n<ul>\r\n \t<li>List the general rules for debits and credits<\/li>\r\n<\/ul>\r\n<\/div>\r\nDouble-entry bookkeeping is the foundation of accounting. In the double-entry system, every transaction affects at least two accounts, and sometimes more. This concept will seem strange at first, but it\u2019s designed to be a self-checking system and to give twice as much information as a simple, single-entry system.\r\n\r\nIn addition, instead of using negative and positive numbers, we record our transactions in terms of left and right\u2014that is, on the left or right side of a record\u2014which in double-entry bookkeeping are called debit and credit.\r\n\r\nUnderstanding debits and credits\u2014and the fact that debits are on the left and credits are on the right\u2014is crucial to your success in accounting.\r\n<div class=\"textbox tryit\">\r\n<h3>Practice Question: Debits and Credits<\/h3>\r\n[ohm_question hide_question_numbers=1]200560[\/ohm_question]\r\n\r\n<\/div>\r\n<h2>The Rules of Debits and Credits<\/h2>\r\nSome accounts are increased by a debit and some are increased by a credit.\u00a0An increase to an account on the left side of the equation (assets) is shown by an entry on the left side of the account (debit). Therefore, those accounts are decreased by a credit. An increase to an account on the right side of the equation (liabilities and equity) is shown by an entry on the right side of the account (credit). Therefore, those accounts are decreased by a debit.\r\n\r\nAfter a while, you will have the rules for debits and credits for each type of account committed to memory, but for now, you can always determine which accounts are increased by a debit (and therefore decreased by a credit) and which accounts are increased by a credit (and therefore decreased by a debit) by using this bit of logic: [latex]\\text{A}=\\text{L}+\\text{E}[\/latex]\r\n\r\nThat is, if the account is an asset, it's on the left side of the equation; thus it would be increased by a debit. If the account is a liability or equity, it's on the right side of the equation; thus it would be increased by a credit.\r\n<div class=\"textbox examples\">\r\n<h3>Debits and Credits: Contributed Capital<\/h3>\r\nLet's take a look at an example from NeatNiks:\r\n\r\nOn October 1, Nick Frank opened a bank account in the name of NeatNiks using $20,000 of his own money from his personal account.\r\n\r\nIn our accounting records, we\u2019ll record the transaction like this:\r\n<ul>\r\n \t<li>Debit checking (an asset) $20,000 to show that the checking account increased.<\/li>\r\n \t<li>Credit the capital account (equity) to show that it also increased.<\/li>\r\n<\/ul>\r\n<h4>Cash Account<\/h4>\r\n<div align=\"left\">\r\n<table class=\"fin-table gridded\">\r\n<tbody>\r\n<tr>\r\n<th scope=\"col\">Debit<\/th>\r\n<th scope=\"col\">Credit<\/th>\r\n<\/tr>\r\n<tr>\r\n<td>$20,000.00<\/td>\r\n<td><\/td>\r\n<\/tr>\r\n<\/tbody>\r\n<\/table>\r\n<\/div>\r\n<h4>Nick Frank, Capital<\/h4>\r\n<div align=\"left\">\r\n<table class=\"fin-table gridded\">\r\n<tbody>\r\n<tr>\r\n<th scope=\"col\">Debit<\/th>\r\n<th scope=\"col\">Credit<\/th>\r\n<\/tr>\r\n<tr>\r\n<td><\/td>\r\n<td>$20,000.00<\/td>\r\n<\/tr>\r\n<\/tbody>\r\n<\/table>\r\n<\/div>\r\nNotice that each account has two sides\u2014left and right. In accounting: debit and credit.\r\n\r\n<\/div>\r\nHere is a summary of the accounts in general:\r\n<ul>\r\n \t<li style=\"font-weight: 400\">On the left side of the accounting equation:\r\n<ul>\r\n \t<li style=\"font-weight: 400\">Assets are increased by a debit, decreased by a credit<\/li>\r\n<\/ul>\r\n<\/li>\r\n<\/ul>\r\n<ul>\r\n \t<li style=\"font-weight: 400\">On the right side of the accounting equation:\r\n<ul>\r\n \t<li style=\"font-weight: 400\">Liabilities are increased by a credit, decreased by a debit<\/li>\r\n<\/ul>\r\n<\/li>\r\n<\/ul>\r\n<ul>\r\n \t<li style=\"list-style-type: none\">\r\n<ul>\r\n \t<li style=\"font-weight: 400\">Equity is increased by a credit, decreased by a debit<\/li>\r\n<\/ul>\r\n<\/li>\r\n<\/ul>\r\nThere are no exceptions to this rule, even though some accounts may seem to have strange rules at first. For instance, the account \u201cowner withdrawals\u201d shows up on the right side of the equation because it is an equity account, but it represents reductions in equity as the owner takes money out of the company. These withdrawals are recorded as debits, because they decrease equity. Similarly, expenses decrease equity. Every time the company records an expense, it is recorded as a debit even though expense accounts appear on the right side of the equation, and revenues are recorded as credits because they increase equity.\r\n<div class=\"textbox key-takeaways\">\r\n<h3>Key Takeaway<\/h3>\r\nThe most important point to remember is the DEBIT literally means LEFT and CREDIT literally means RIGHT.\r\n\r\n<\/div>\r\nHere is a summary of how different accounts are affected by debits (DR) and credits (CR):\r\n<table class=\"fin-table gridded\">\r\n<tbody>\r\n<tr>\r\n<th class=\"c\" scope=\"col\">Account type<\/th>\r\n<th class=\"c\" scope=\"col\">DR (Left side of the accounting equation)<\/th>\r\n<th class=\"c\" scope=\"col\">CR (Right side of the accounting equation)<\/th>\r\n<\/tr>\r\n<tr>\r\n<th scope=\"row\">Assets<\/th>\r\n<td class=\"c\">Increase<\/td>\r\n<td class=\"c\">Decrease<\/td>\r\n<\/tr>\r\n<tr>\r\n<th scope=\"row\">Liabilities<\/th>\r\n<td class=\"c\">Decrease<\/td>\r\n<td class=\"c\">Increase<\/td>\r\n<\/tr>\r\n<tr>\r\n<th scope=\"row\">Equity<\/th>\r\n<td class=\"c\">Decrease<\/td>\r\n<td class=\"c\">Increase<\/td>\r\n<\/tr>\r\n<tr>\r\n<th scope=\"row\">Capital Contributions increase equity, therefore<\/th>\r\n<td>N\/A<\/td>\r\n<td class=\"c\">contributions shown as credits<\/td>\r\n<\/tr>\r\n<tr>\r\n<th scope=\"row\">Owner withdrawals decrease equity, therefore<\/th>\r\n<td class=\"c\">withdrawals are shown as debits<\/td>\r\n<td>N\/A<\/td>\r\n<\/tr>\r\n<tr>\r\n<th scope=\"row\">Revenues increase equity, therefore<\/th>\r\n<td>N\/A<\/td>\r\n<td class=\"c\">revenues are shown as credit<\/td>\r\n<\/tr>\r\n<tr>\r\n<th scope=\"row\">Expenses decrease equity, therefore<\/th>\r\n<td class=\"c\">expenses are shown as debits<\/td>\r\n<td>N\/A<\/td>\r\n<\/tr>\r\n<\/tbody>\r\n<\/table>\r\nLet's take a look at one more example, also from NeatNiks.\r\n<div class=\"textbox examples\">\r\n<h3>Debits and Credits: Revenue Received<\/h3>\r\nOn October 15, Nick received $1,500 cash for services performed.\r\n\r\nIn our accounting records, we\u2019ll record the transaction like this:\r\n<ul>\r\n \t<li>Debit checking (an asset) $1,500 to show that the checking account increased.<\/li>\r\n \t<li>Credit revenues (a sub-account of equity) to show that equity also increased.<\/li>\r\n<\/ul>\r\n<h4>Checking Account<\/h4>\r\n<div align=\"left\">\r\n<table class=\"fin-table gridded\">\r\n<tbody>\r\n<tr>\r\n<th scope=\"col\">Debit<\/th>\r\n<th scope=\"col\">Credit<\/th>\r\n<\/tr>\r\n<tr>\r\n<td>$1,500.00<\/td>\r\n<td><\/td>\r\n<\/tr>\r\n<\/tbody>\r\n<\/table>\r\n<\/div>\r\n<h4>Service Revenue<\/h4>\r\n<div align=\"left\">\r\n<table class=\"fin-table gridded\">\r\n<tbody>\r\n<tr>\r\n<th scope=\"col\">Debit<\/th>\r\n<th scope=\"col\">Credit<\/th>\r\n<\/tr>\r\n<tr>\r\n<td><\/td>\r\n<td>$1,500.00<\/td>\r\n<\/tr>\r\n<\/tbody>\r\n<\/table>\r\n<\/div>\r\n<\/div>\r\nWe\u2019ll be exploring this concept in more depth in the sections on journaling and posting, and on learning by applying the rules of debits and credits to a variety of transactions; but for now, the following bears repeating: to debit an account means to post an entry to the left side of the account and to credit an account means to post an entry to the right side of the account. Debit does not mean increase or decrease unless you are using that term in conjunction with a specific account.\r\n\r\nHere\u2019s another way to look at it:\r\n<table class=\"fin-table gridded\">\r\n<tbody>\r\n<tr>\r\n<td style=\"text-align: right\" colspan=\"2\">Assets =<\/td>\r\n<td colspan=\"2\">Liabilities + Owner\u2019s Equity<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>Left side<\/td>\r\n<td>DR<\/td>\r\n<td>CR<\/td>\r\n<td class=\"r\">Right side<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>Assets<\/td>\r\n<td>+<\/td>\r\n<td>\u2212<\/td>\r\n<td><\/td>\r\n<\/tr>\r\n<tr>\r\n<td><\/td>\r\n<td>\u2212<\/td>\r\n<td>+<\/td>\r\n<td>Liabilities<\/td>\r\n<\/tr>\r\n<tr>\r\n<td><\/td>\r\n<td>-<\/td>\r\n<td>+<\/td>\r\n<td>Capital Contributions<\/td>\r\n<\/tr>\r\n<tr>\r\n<td><\/td>\r\n<td>+<\/td>\r\n<td>-<\/td>\r\n<td>Owner Withdrawals<\/td>\r\n<\/tr>\r\n<tr>\r\n<td><\/td>\r\n<td>-<\/td>\r\n<td>+<\/td>\r\n<td>Revenues<\/td>\r\n<\/tr>\r\n<tr>\r\n<td><\/td>\r\n<td>+<\/td>\r\n<td>-<\/td>\r\n<td>Expenses<\/td>\r\n<\/tr>\r\n<\/tbody>\r\n<\/table>\r\n<div class=\"textbox key-takeaways\">\r\n<h3>Key Takeaways<\/h3>\r\nHere's a simple way to remember the rules of Debits and Credits:\r\n<h2><span style=\"background-color: #00ccff\"><strong><span style=\"background-color: #eaf5ea\"> \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0\u00a0<\/span><\/strong><\/span><span style=\"text-decoration: underline;background-color: #ccffff\"><strong><u>A<\/u><\/strong><\/span>fter <span style=\"text-decoration: underline;background-color: #ccffff\"><strong>E<\/strong><\/span>ating <span style=\"text-decoration: underline;background-color: #ccffff\"><strong>D<\/strong><\/span>inner<strong>,<\/strong> <span style=\"text-decoration: underline;background-color: #ffcc99\"><strong>L<\/strong><\/span>et's <span style=\"background-color: #ffcc99\"><strong><span style=\"text-decoration: underline\">R<\/span><\/strong><\/span>ead the <span style=\"background-color: #ffcc99\"><strong><span style=\"text-decoration: underline\">C<\/span><\/strong><\/span>omics.<\/h2>\r\n<ul>\r\n \t<li><span style=\"text-decoration: underline;background-color: #ccffff\"><strong>A<\/strong><\/span>ssets, <span style=\"text-decoration: underline;background-color: #ccffff\"><strong>E<\/strong><\/span>xpenses, <span style=\"text-decoration: underline;background-color: #ccffff\"><strong>D<\/strong><\/span>rawing have <span style=\"background-color: #ccffff\"><strong>DEBIT<\/strong><\/span> balances<\/li>\r\n \t<li><span style=\"text-decoration: underline;background-color: #ffcc99\"><strong>L<\/strong><\/span>iabilities, <span style=\"background-color: #ffcc99\"><strong><span style=\"text-decoration: underline\">R<\/span><\/strong><\/span>evenue, <span style=\"background-color: #ffcc99\"><strong><span style=\"text-decoration: underline\">C<\/span><\/strong><\/span>apital have <span style=\"background-color: #ffcc99\"><strong>CREDIT<\/strong><\/span> balances.<\/li>\r\n<\/ul>\r\n<\/div>\r\n&nbsp;\r\n\r\nThis concept will become clearer as you go on. You might notice there is no minus sign on the debit side of the Capital Contributions category. There is no minus sign because we never reduce that account. The opposite of a capital contribution is a withdrawal.\r\n<div class=\"textbox tryit\">\r\n<h3>Practice Question: Owner Withdrawals<\/h3>\r\nhttps:\/\/assessments.lumenlearning.com\/assessments\/23366\r\n\r\n<\/div>\r\n<span style=\"font-size: 1rem;text-align: initial\">Here\u2019s a fun video to help you remember debit on the left and credits on the right:<\/span>\r\n\r\nhttps:\/\/youtu.be\/j71Kmxv7smk\r\n<div class=\"textbox tryit\">\r\n<h3>Practice Questions<\/h3>\r\nhttps:\/\/assessments.lumenlearning.com\/assessments\/23367\r\n\r\nhttps:\/\/assessments.lumenlearning.com\/assessments\/23368\r\n\r\n[ohm_question hide_question_numbers=1]200697[\/ohm_question]\r\n\r\n<\/div>","rendered":"<div class=\"textbox learning-objectives\">\n<h3>Learning Outcomes<\/h3>\n<ul>\n<li>List the general rules for debits and credits<\/li>\n<\/ul>\n<\/div>\n<p>Double-entry bookkeeping is the foundation of accounting. In the double-entry system, every transaction affects at least two accounts, and sometimes more. This concept will seem strange at first, but it\u2019s designed to be a self-checking system and to give twice as much information as a simple, single-entry system.<\/p>\n<p>In addition, instead of using negative and positive numbers, we record our transactions in terms of left and right\u2014that is, on the left or right side of a record\u2014which in double-entry bookkeeping are called debit and credit.<\/p>\n<p>Understanding debits and credits\u2014and the fact that debits are on the left and credits are on the right\u2014is crucial to your success in accounting.<\/p>\n<div class=\"textbox tryit\">\n<h3>Practice Question: Debits and Credits<\/h3>\n<p><iframe loading=\"lazy\" id=\"ohm200560\" class=\"resizable\" src=\"https:\/\/ohm.lumenlearning.com\/multiembedq.php?id=200560&theme=oea&iframe_resize_id=ohm200560\" width=\"100%\" height=\"150\"><\/iframe><\/p>\n<\/div>\n<h2>The Rules of Debits and Credits<\/h2>\n<p>Some accounts are increased by a debit and some are increased by a credit.\u00a0An increase to an account on the left side of the equation (assets) is shown by an entry on the left side of the account (debit). Therefore, those accounts are decreased by a credit. An increase to an account on the right side of the equation (liabilities and equity) is shown by an entry on the right side of the account (credit). Therefore, those accounts are decreased by a debit.<\/p>\n<p>After a while, you will have the rules for debits and credits for each type of account committed to memory, but for now, you can always determine which accounts are increased by a debit (and therefore decreased by a credit) and which accounts are increased by a credit (and therefore decreased by a debit) by using this bit of logic: [latex]\\text{A}=\\text{L}+\\text{E}[\/latex]<\/p>\n<p>That is, if the account is an asset, it&#8217;s on the left side of the equation; thus it would be increased by a debit. If the account is a liability or equity, it&#8217;s on the right side of the equation; thus it would be increased by a credit.<\/p>\n<div class=\"textbox examples\">\n<h3>Debits and Credits: Contributed Capital<\/h3>\n<p>Let&#8217;s take a look at an example from NeatNiks:<\/p>\n<p>On October 1, Nick Frank opened a bank account in the name of NeatNiks using $20,000 of his own money from his personal account.<\/p>\n<p>In our accounting records, we\u2019ll record the transaction like this:<\/p>\n<ul>\n<li>Debit checking (an asset) $20,000 to show that the checking account increased.<\/li>\n<li>Credit the capital account (equity) to show that it also increased.<\/li>\n<\/ul>\n<h4>Cash Account<\/h4>\n<div style=\"text-align: left;\">\n<table class=\"fin-table gridded\">\n<tbody>\n<tr>\n<th scope=\"col\">Debit<\/th>\n<th scope=\"col\">Credit<\/th>\n<\/tr>\n<tr>\n<td>$20,000.00<\/td>\n<td><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/div>\n<h4>Nick Frank, Capital<\/h4>\n<div style=\"text-align: left;\">\n<table class=\"fin-table gridded\">\n<tbody>\n<tr>\n<th scope=\"col\">Debit<\/th>\n<th scope=\"col\">Credit<\/th>\n<\/tr>\n<tr>\n<td><\/td>\n<td>$20,000.00<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/div>\n<p>Notice that each account has two sides\u2014left and right. In accounting: debit and credit.<\/p>\n<\/div>\n<p>Here is a summary of the accounts in general:<\/p>\n<ul>\n<li style=\"font-weight: 400\">On the left side of the accounting equation:\n<ul>\n<li style=\"font-weight: 400\">Assets are increased by a debit, decreased by a credit<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<ul>\n<li style=\"font-weight: 400\">On the right side of the accounting equation:\n<ul>\n<li style=\"font-weight: 400\">Liabilities are increased by a credit, decreased by a debit<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<ul>\n<li style=\"list-style-type: none\">\n<ul>\n<li style=\"font-weight: 400\">Equity is increased by a credit, decreased by a debit<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<p>There are no exceptions to this rule, even though some accounts may seem to have strange rules at first. For instance, the account \u201cowner withdrawals\u201d shows up on the right side of the equation because it is an equity account, but it represents reductions in equity as the owner takes money out of the company. These withdrawals are recorded as debits, because they decrease equity. Similarly, expenses decrease equity. Every time the company records an expense, it is recorded as a debit even though expense accounts appear on the right side of the equation, and revenues are recorded as credits because they increase equity.<\/p>\n<div class=\"textbox key-takeaways\">\n<h3>Key Takeaway<\/h3>\n<p>The most important point to remember is the DEBIT literally means LEFT and CREDIT literally means RIGHT.<\/p>\n<\/div>\n<p>Here is a summary of how different accounts are affected by debits (DR) and credits (CR):<\/p>\n<table class=\"fin-table gridded\">\n<tbody>\n<tr>\n<th class=\"c\" scope=\"col\">Account type<\/th>\n<th class=\"c\" scope=\"col\">DR (Left side of the accounting equation)<\/th>\n<th class=\"c\" scope=\"col\">CR (Right side of the accounting equation)<\/th>\n<\/tr>\n<tr>\n<th scope=\"row\">Assets<\/th>\n<td class=\"c\">Increase<\/td>\n<td class=\"c\">Decrease<\/td>\n<\/tr>\n<tr>\n<th scope=\"row\">Liabilities<\/th>\n<td class=\"c\">Decrease<\/td>\n<td class=\"c\">Increase<\/td>\n<\/tr>\n<tr>\n<th scope=\"row\">Equity<\/th>\n<td class=\"c\">Decrease<\/td>\n<td class=\"c\">Increase<\/td>\n<\/tr>\n<tr>\n<th scope=\"row\">Capital Contributions increase equity, therefore<\/th>\n<td>N\/A<\/td>\n<td class=\"c\">contributions shown as credits<\/td>\n<\/tr>\n<tr>\n<th scope=\"row\">Owner withdrawals decrease equity, therefore<\/th>\n<td class=\"c\">withdrawals are shown as debits<\/td>\n<td>N\/A<\/td>\n<\/tr>\n<tr>\n<th scope=\"row\">Revenues increase equity, therefore<\/th>\n<td>N\/A<\/td>\n<td class=\"c\">revenues are shown as credit<\/td>\n<\/tr>\n<tr>\n<th scope=\"row\">Expenses decrease equity, therefore<\/th>\n<td class=\"c\">expenses are shown as debits<\/td>\n<td>N\/A<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<p>Let&#8217;s take a look at one more example, also from NeatNiks.<\/p>\n<div class=\"textbox examples\">\n<h3>Debits and Credits: Revenue Received<\/h3>\n<p>On October 15, Nick received $1,500 cash for services performed.<\/p>\n<p>In our accounting records, we\u2019ll record the transaction like this:<\/p>\n<ul>\n<li>Debit checking (an asset) $1,500 to show that the checking account increased.<\/li>\n<li>Credit revenues (a sub-account of equity) to show that equity also increased.<\/li>\n<\/ul>\n<h4>Checking Account<\/h4>\n<div style=\"text-align: left;\">\n<table class=\"fin-table gridded\">\n<tbody>\n<tr>\n<th scope=\"col\">Debit<\/th>\n<th scope=\"col\">Credit<\/th>\n<\/tr>\n<tr>\n<td>$1,500.00<\/td>\n<td><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/div>\n<h4>Service Revenue<\/h4>\n<div style=\"text-align: left;\">\n<table class=\"fin-table gridded\">\n<tbody>\n<tr>\n<th scope=\"col\">Debit<\/th>\n<th scope=\"col\">Credit<\/th>\n<\/tr>\n<tr>\n<td><\/td>\n<td>$1,500.00<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/div>\n<\/div>\n<p>We\u2019ll be exploring this concept in more depth in the sections on journaling and posting, and on learning by applying the rules of debits and credits to a variety of transactions; but for now, the following bears repeating: to debit an account means to post an entry to the left side of the account and to credit an account means to post an entry to the right side of the account. Debit does not mean increase or decrease unless you are using that term in conjunction with a specific account.<\/p>\n<p>Here\u2019s another way to look at it:<\/p>\n<table class=\"fin-table gridded\">\n<tbody>\n<tr>\n<td style=\"text-align: right\" colspan=\"2\">Assets =<\/td>\n<td colspan=\"2\">Liabilities + Owner\u2019s Equity<\/td>\n<\/tr>\n<tr>\n<td>Left side<\/td>\n<td>DR<\/td>\n<td>CR<\/td>\n<td class=\"r\">Right side<\/td>\n<\/tr>\n<tr>\n<td>Assets<\/td>\n<td>+<\/td>\n<td>\u2212<\/td>\n<td><\/td>\n<\/tr>\n<tr>\n<td><\/td>\n<td>\u2212<\/td>\n<td>+<\/td>\n<td>Liabilities<\/td>\n<\/tr>\n<tr>\n<td><\/td>\n<td>&#8211;<\/td>\n<td>+<\/td>\n<td>Capital Contributions<\/td>\n<\/tr>\n<tr>\n<td><\/td>\n<td>+<\/td>\n<td>&#8211;<\/td>\n<td>Owner Withdrawals<\/td>\n<\/tr>\n<tr>\n<td><\/td>\n<td>&#8211;<\/td>\n<td>+<\/td>\n<td>Revenues<\/td>\n<\/tr>\n<tr>\n<td><\/td>\n<td>+<\/td>\n<td>&#8211;<\/td>\n<td>Expenses<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<div class=\"textbox key-takeaways\">\n<h3>Key Takeaways<\/h3>\n<p>Here&#8217;s a simple way to remember the rules of Debits and Credits:<\/p>\n<h2><span style=\"background-color: #00ccff\"><strong><span style=\"background-color: #eaf5ea\"> \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0\u00a0<\/span><\/strong><\/span><span style=\"text-decoration: underline;background-color: #ccffff\"><strong><u>A<\/u><\/strong><\/span>fter <span style=\"text-decoration: underline;background-color: #ccffff\"><strong>E<\/strong><\/span>ating <span style=\"text-decoration: underline;background-color: #ccffff\"><strong>D<\/strong><\/span>inner<strong>,<\/strong> <span style=\"text-decoration: underline;background-color: #ffcc99\"><strong>L<\/strong><\/span>et&#8217;s <span style=\"background-color: #ffcc99\"><strong><span style=\"text-decoration: underline\">R<\/span><\/strong><\/span>ead the <span style=\"background-color: #ffcc99\"><strong><span style=\"text-decoration: underline\">C<\/span><\/strong><\/span>omics.<\/h2>\n<ul>\n<li><span style=\"text-decoration: underline;background-color: #ccffff\"><strong>A<\/strong><\/span>ssets, <span style=\"text-decoration: underline;background-color: #ccffff\"><strong>E<\/strong><\/span>xpenses, <span style=\"text-decoration: underline;background-color: #ccffff\"><strong>D<\/strong><\/span>rawing have <span style=\"background-color: #ccffff\"><strong>DEBIT<\/strong><\/span> balances<\/li>\n<li><span style=\"text-decoration: underline;background-color: #ffcc99\"><strong>L<\/strong><\/span>iabilities, <span style=\"background-color: #ffcc99\"><strong><span style=\"text-decoration: underline\">R<\/span><\/strong><\/span>evenue, <span style=\"background-color: #ffcc99\"><strong><span style=\"text-decoration: underline\">C<\/span><\/strong><\/span>apital have <span style=\"background-color: #ffcc99\"><strong>CREDIT<\/strong><\/span> balances.<\/li>\n<\/ul>\n<\/div>\n<p>&nbsp;<\/p>\n<p>This concept will become clearer as you go on. You might notice there is no minus sign on the debit side of the Capital Contributions category. There is no minus sign because we never reduce that account. The opposite of a capital contribution is a withdrawal.<\/p>\n<div class=\"textbox tryit\">\n<h3>Practice Question: Owner Withdrawals<\/h3>\n<p>\t<iframe id=\"lumen_assessment_23366\" class=\"resizable\" src=\"https:\/\/assessments.lumenlearning.com\/assessments\/load?assessment_id=23366&#38;embed=1&#38;external_user_id=&#38;external_context_id=&#38;iframe_resize_id=lumen_assessment_23366\" frameborder=\"0\" style=\"border:none;width:100%;height:100%;min-height:400px;\"><br \/>\n\t<\/iframe><\/p>\n<\/div>\n<p><span style=\"font-size: 1rem;text-align: initial\">Here\u2019s a fun video to help you remember debit on the left and credits on the right:<\/span><\/p>\n<p><iframe loading=\"lazy\" id=\"oembed-1\" title=\"Colin Dodds - Debit Credit Theory (Accounting Rap Song)\" width=\"500\" height=\"375\" src=\"https:\/\/www.youtube.com\/embed\/j71Kmxv7smk?feature=oembed&#38;rel=0\" frameborder=\"0\" allowfullscreen=\"allowfullscreen\"><\/iframe><\/p>\n<div class=\"textbox tryit\">\n<h3>Practice Questions<\/h3>\n<p>\t<iframe id=\"lumen_assessment_23367\" class=\"resizable\" src=\"https:\/\/assessments.lumenlearning.com\/assessments\/load?assessment_id=23367&#38;embed=1&#38;external_user_id=&#38;external_context_id=&#38;iframe_resize_id=lumen_assessment_23367\" frameborder=\"0\" style=\"border:none;width:100%;height:100%;min-height:400px;\"><br \/>\n\t<\/iframe><\/p>\n<p>\t<iframe id=\"lumen_assessment_23368\" class=\"resizable\" src=\"https:\/\/assessments.lumenlearning.com\/assessments\/load?assessment_id=23368&#38;embed=1&#38;external_user_id=&#38;external_context_id=&#38;iframe_resize_id=lumen_assessment_23368\" frameborder=\"0\" style=\"border:none;width:100%;height:100%;min-height:400px;\"><br \/>\n\t<\/iframe><\/p>\n<p><iframe loading=\"lazy\" id=\"ohm200697\" class=\"resizable\" src=\"https:\/\/ohm.lumenlearning.com\/multiembedq.php?id=200697&theme=oea&iframe_resize_id=ohm200697\" width=\"100%\" height=\"150\"><\/iframe><\/p>\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-2997\">\n\t\t\t\t\t\t\t <div class=\"licensing\"><div class=\"license-attribution-dropdown-subheading\">CC licensed content, Original<\/div><ul class=\"citation-list\"><li>Rules of Debits and Credits. <strong>Authored by<\/strong>: Joseph Cooke. <strong>Provided by<\/strong>: Lumen Learning. <strong>License<\/strong>: <em><a target=\"_blank\" rel=\"license\" href=\"https:\/\/creativecommons.org\/licenses\/by\/4.0\/\">CC BY: Attribution<\/a><\/em><\/li><\/ul><div class=\"license-attribution-dropdown-subheading\">CC licensed content, Shared previously<\/div><ul class=\"citation-list\"><li>General Rules for Debits and Credits. <strong>Authored by<\/strong>: Jaclyn Strauss. <strong>Provided by<\/strong>: Broward College. <strong>License<\/strong>: <em><a target=\"_blank\" rel=\"license\" href=\"https:\/\/creativecommons.org\/licenses\/by\/4.0\/\">CC BY: Attribution<\/a><\/em><\/li><\/ul><div class=\"license-attribution-dropdown-subheading\">All rights reserved content<\/div><ul class=\"citation-list\"><li>Colin Dodds - Debit Credit Theory (Accounting Rap Song). <strong>Authored by<\/strong>: Mr. Colin Dodds. <strong>Located at<\/strong>: <a target=\"_blank\" href=\"https:\/\/youtu.be\/j71Kmxv7smk\">https:\/\/youtu.be\/j71Kmxv7smk<\/a>. <strong>License<\/strong>: <em>All Rights Reserved<\/em>. <strong>License Terms<\/strong>: Standard YouTube License<\/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":17,"menu_order":4,"template":"","meta":{"_candela_citation":"[{\"type\":\"original\",\"description\":\"Rules of Debits and Credits\",\"author\":\"Joseph Cooke\",\"organization\":\"Lumen Learning\",\"url\":\"\",\"project\":\"\",\"license\":\"cc-by\",\"license_terms\":\"\"},{\"type\":\"cc\",\"description\":\"General Rules for Debits and Credits\",\"author\":\"Jaclyn Strauss\",\"organization\":\"Broward College\",\"url\":\"\",\"project\":\"\",\"license\":\"cc-by\",\"license_terms\":\"\"},{\"type\":\"copyrighted_video\",\"description\":\"Colin Dodds - 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