list of Debit items of PL
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DEBITS AND CREDITS EXPLAINED
Every transaction you make will lead to (at least) two entries in your accounts, a debit and a credit. More complex transactions may lead to a larger number of postings, but the total of the debits for that transaction will always be equal to the total of the credits.
EASY WAY TO UNDERSTAND WHERE TO PUT YOUR DEBITS AND CREDITS
A Debit to the balance sheet is good (increasing an asset or reducing a liability)A Debit to the profit and loss is bad (increasing an expense or reducing income)A Credit to the balance sheet is bad (reducing an asset or increasing a liability)A Credit to the profit and loss is good (increasing income or reducing an expense)
TAKE THE EXAMPLE OF A SIMPLE CASH SALE
The two entries are:
Debit cash on the balance sheet (cash balance has increased)Credit sales on the profit & loss (a sale has been made)
These are both good for the business.
Every transaction you make will lead to (at least) two entries in your accounts, a debit and a credit. More complex transactions may lead to a larger number of postings, but the total of the debits for that transaction will always be equal to the total of the credits.
EASY WAY TO UNDERSTAND WHERE TO PUT YOUR DEBITS AND CREDITS
A Debit to the balance sheet is good (increasing an asset or reducing a liability)A Debit to the profit and loss is bad (increasing an expense or reducing income)A Credit to the balance sheet is bad (reducing an asset or increasing a liability)A Credit to the profit and loss is good (increasing income or reducing an expense)
TAKE THE EXAMPLE OF A SIMPLE CASH SALE
The two entries are:
Debit cash on the balance sheet (cash balance has increased)Credit sales on the profit & loss (a sale has been made)
These are both good for the business.
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