Accounting Cheat Sheet For Transactions Page 5
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Likewise, since Liabilities, Owner's Equity (Capital), and Revenue Accounts normally have a Credit Balance
in order to Increase the Balance of a Liability, Owner's Equity, or Revenue Account the amount would be
entered in the Credit or Right Side Column and the amount would be entered in the Debit or Left Side column
to Decrease the Account's Balance.
The Debit and Credit Rules Presented as A Table
Normal
Increase To Account
Decrease To Account
Account Type
Account Example
Balance
Balance
Balance
Property Accounts
Debit - Left Column Of
Credit - Right Column
Cash, Accounts
Asset
Debit
Account
Of Account
Receivable
Property Rights Accounts
Credit - Right Column
Debit - Left Column Of
Liability
Credit
Accounts Payable
Of Account
Account
Credit - Right Column
Debit - Left Column Of
Owner's Equity
Credit
Owner's Capital
Of Account
Account
Credit - Right Column
Debit - Left Column Of
Revenue
Credit
Sales
Of Account
Account
Costs and
Debit - Left Column Of
Credit - Right Column
Rent, Utilities,
Debit
Expenses
Account
Of Account
Advertising
Debit - Left Column Of
Credit - Right Column
Owner Draws
Debit
Owner Draws
Account
Of Account
Typical Types Of Business Transactions
and the Debits and Credits and Accounts Used To Record Them
In a typical business transaction we get something and we give up something.
Sale-Sell goods and/or services
(1) Cash Sale-customer pays at the time of sale
The business gets cash or a check from their customer and gives up a product or service to their
customer.
Accounts Used:
Debit: Cash
Credit: Sales
(2) On Account Sale-business allows the customer time to pay
The business gets a promise to pay from their customer and gives up a product or service to their
customer.
Accounts Used:
Debit: Accounts Receivable
Credit: Sales
Purchase goods and/or services
(3) Cash Purchase-business pays the supplier at the time of purchase
The business gets a product or service from their supplier and gives up cash or a check to their
supplier.
Accounts Used:
Debit: Expense or Inventory Account
Credit: Cash
(4) On Account Purchase-supplier allows the business time to pay
The business gets a product or service from a supplier and gives up a promise to pay to their supplier.
Accounts Used:
Debit: Expense or Inventory Account
Credit: Accounts Payable
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