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Download Accounting Mnemonics-How to Remember the Debit and Credit
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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.