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Accounting Mnemonics-How to Remember the Debit and Credit Rules
Accounting Equation is Total Assets= Total Liabilities + Total Equities
Accounts have a left side and a right side. The left side is always the debit side and the right side
is always the credit side. We use T-Accounts for learning and they represent ledger accounts.
For example, the ledger account for CASH.
Journals are used to record transactions. We will record both debits and credits each time. The
total amount of the debits must always equal the total amount of the credits.
Asset Rules:
Increase by debit and decrease by credit
Liability Rules:
Increase by credit and decrease by debit
Equity Rules:
General rule: increase by credit and decrease by debit
As you might know, equity has 4 components:
Revenues and Capital:
Increase by credits and decrease by debits
Expenses and Withdrawals:
Increase by debits and decrease by credits
Mnemonics (AWE-CLR)
Here is a mnemonic to help you remember the debit and credit rules:
AWE- Assets, Withdrawals, Expenses are all increased with debits
CLR- Capital, Liabilities, Revenues are all increased with credits
As you apply these rules by doing your homework the rules will become clear. Please also
remember the debit and credit rules for CASH. Cash is increased through debits and decreased
through credits. If you know the rules for CASH, this will help you determine one side of the
journal entry for many transactions.