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March 26, 2017

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Is there a method of determining if you debit or credit an account? How do you know if you should debit or credit a transaction?


If it's a balance sheet accout you need to learn (and mrmorize) which side of the equation i't on, and it's normal balance. Assets normally have debit balances, Liability and equity accounts normally have credit balances. The normal balance is the kind of entry that will increase the account. The temporary accounts, i.e. expense and revenue accounts need to be learned too.
As for a method, it's only familiarity with them that will help. Just keep practicing making journal entries and preparing statements.

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