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What are some tips to make learning debits and credits easy?

Author:
Harold Averkamp, CPA, MBA

Here are five tips to make learning debits and credits easier:

  1. The accounts for expenses are nearly always debited. For example, when a company pays its monthly rent, it debits Rent Expense. If it runs an ad on the radio, it will debit Advertising Expense.
  2. The accounts for revenues are almost always credited. When a bakery sells its products, it credits Sales. When a bank earns interest on its loans, it credits Loan Interest Revenues.
  3. When a company issues a check, it credits the asset account Cash.
  4. When a company receives money, it debits Cash.
  5. Every transaction will require a debit to at least one account and a credit to at least one other account.

Here are two examples to illustrate our five tips.

  • A bakery records its cash sales at a local market with a debit to Cash and a credit to Sales.
  • A company records its $400 payment to repair its delivery van with a debit to Vehicle Repair Expense and a credit to Cash.
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About the Author

Harold Averkamp

For the past 52 years, Harold Averkamp (CPA, MBA) has
worked as an accounting supervisor, manager, consultant, university instructor, and innovator in teaching accounting online. He is the sole author of all the materials on AccountingCoach.com.

Learn More About Harold

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