how can you determine what side is a debit and what side is a credit

A debit is an expense that is paid. A credit is income.

The following rules are applied to decide debit or credit side.

1.Debit what comes in and credit what goes out
2.Debit the receiver and credit the giver
3 Debit the expenses, losses and credit incomes and gains

The following rules are applied to decide debit or credit side.

1.Debit what comes in and credit what goes out
2.Debit the receiver and credit the giver
3 Debit the expenses, losses and credit incomes and gains

To determine whether an account should be recorded as a debit or credit, you need to consider three general rules. These rules are commonly known as the "golden rules" of accounting.

1. Debit what comes in and credit what goes out: When an asset or expense increases, you record it as a debit. Conversely, when an asset or expense decreases, you record it as a credit. For example, if cash is received, it is recorded as a debit, but if cash is paid out, it is recorded as a credit.

2. Debit the receiver and credit the giver: When a business receives something, such as goods or services, you record it as a debit. On the other hand, when a business gives something, you record it as a credit. For example, if a business receives inventory, it is recorded as a debit, but if a business sells inventory, it is recorded as a credit.

3. Debit the expenses, losses, and credit the incomes, and gains: Expenses and losses are recorded as debits because they decrease the company's assets. Incomes and gains, on the other hand, are recorded as credits because they increase the company's assets. For example, if a business incurs an expense, it is recorded as a debit, but if a business earns income, it is recorded as a credit.

It is important to note that these rules are used in double-entry bookkeeping, where every transaction has an equal and opposite effect on two or more accounts. Understanding these rules helps ensure accurate recording and balancing of accounts in the financial statements.