Hi.,
i am searching for Debit And Credit Explain with Example.
In accounting double entry was developed LUCAPACIOLI of Italy .Every accounting transaction has two aspects both of which are recorded.
Every transaction has two sides
1)DEBIT
2)CREDIT
DEBIT: It is one of the aspect in a transaction ,which arises in the following
Situations.
• Receipt of cash: cash must be debited.
• expenses must be debited.
• increase in assets : assets must be debited.
CREDIT: It is another part of the transaction ,which arises in the following
Situations.
• Payment of cash:cash must be credited
• Incomes must be credited
• Increases in liability:liability has to be credited.
EXAMPLE:
1)CASH PAID TO Mr.X
Mr.X a/c…………DR xxxxx …………
TO cash a/c …….. xxxxxx
[here cash account is credited for payment]
2)ASSETS PURCHASED FOR 5000000
ASSETS a/c…………..DR 5000000 ……………
TO cash a/c ……………. 5000000
[here assets a/c is debited for increasing it is value]
