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Debits & Credits by Account

Balance Sheet Accounts

 

Assets = Liabilities + Owner's Equity
or
Assets - Liabilities = Owners Equity

 

1-xxxx Asset Account - Anything you own that has value. E.g., Checking, Accounts Receivable, Inventory, Fixed Assets (furniture, computers, etc

  • DEBIT increases
  • CREDIT decreases

2-xxxx Liability Account - Money you owe. E.g., Accounts Payable, Credit Cards, Taxes, Loans

  • DEBIT decreases
  • CREDIT increases

3-xxxx Owner's Equity Accounts - E.g., Retained Earnings, Current Year Earnings, Historical Balancing

  • DEBIT decreases
  • CREDIT increases

 

Profit & Loss or Income Statement Accounts

 

Income - Cost of Goods Sold - Expenses = Profit or (Loss)

 

4-xxxx Income Accounts - E.g., Money received from sales or other sources

  • DEBIT decreases
  • CREDIT increases

5-xxxx Cost of Goods Sold Accounts - E.g., Expenses incurred to purchase an item or make an item sold

  • DEBIT increases
  • CREDIT decreases

6-xxxx Expense Accounts - E.g., Expenses such as rent, office supplies, wages, etc.

  • DEBIT increases
  • CREDIT decreases

7-xxxx NOT APPLICABLE - AccountEdge does not use account numbers that start with 7-

8-xxxx Other Income Accounts - E.g., Income such as interest, purchase discounts, etc.

  • DEBIT decreases
  • CREDIT increases

9-xxxx Other Expense Accounts - E.g., Expenses such as interest, incentives, etc.

  • DEBIT increases
  • CREDIT decreases