Show credit and debit rules for expense, Accounting Basics

Assignment Help:

Q. Show Credit and debit rules for expense?

The credit and debit rules for expense and Dividends accounts and for revenue accounts follow logically if you remember that expenses and dividends are decreases in stockholders' equity and revenues are increases in stockholders' equity. Ever since stockholders' equity accounts decrease on the debit side expense and Dividend accounts increase on the debit side.

Since stockholders' equity accounts raise on the credit side revenue accounts increase on the credit side. The last three credit and debit rules are:

- Diminish in revenue accounts are debits increases are credits.

- Raise in expense accounts are debits decreases are credits.

- Raise in Dividends accounts are debits decreases are credits.

Note first the management of expense and Dividends accounts as if they were sub classifications of the debit side of the Retained Earnings account.


Related Discussions:- Show credit and debit rules for expense

Learning objectives of current ratio, Q. Learning objectives of current rat...

Q. Learning objectives of current ratio? - Analyze the transactions by examining source documents. - Journalize the transactions in the journal. - Post the journal entrie

What is effective collection?, Its depends on the credit period of the comp...

Its depends on the credit period of the company i.e. A company credit period 30 days 85 of the debtors collection should be recovered with in credit period. We can say the Effectiv

Objectives of financial reporting, Q. Objectives of financial reporting? ...

Q. Objectives of financial reporting? Financial reporting objectives are the broad overriding objectives sought by accountants engaging in financial reporting. According to the

Cost, how much is it to get a tutor, per hour or package? i am in an mba pr...

how much is it to get a tutor, per hour or package? i am in an mba program now

Gain and loss recognition principle, Q. Gain and loss recognition principle...

Q. Gain and loss recognition principle? The gain and loss recognition principle states that we record gains merely when realized but losses when they first become evident. Ther

Workers compensation insurance, Workers compensation insurance Workers...

Workers compensation insurance Workers compensation insurance provides protection for employees who suffer a job-related illness or injury. Entire cost is generally paid by t

Career as an accounting professor, Do you enjoy college life? Do you enjoy ...

Do you enjoy college life? Do you enjoy teaching others? If therefore you might want to consider a career as a college professor. Even though a position as a college professor may

Debit credit, what is the basic meaning of debit and credit

what is the basic meaning of debit and credit

Income statement, Hermann Industries is forecasting the following income st...

Hermann Industries is forecasting the following income statement: Sales $10,000,000 Operating costs (excluding depreciation and amortization) 5,500,000 EBITDA $4,500,000 Depreciati

Company law, I want a company law assignment

I want a company law assignment

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd