janice_www

janice_www

On 1 Jan 20x8, a business had assets of £20,000 and liabilities of £14,000.
By 31 Dec 20x8 it had assets of £30,000 and liabilities of £20,000.

DR
10,000
balance c/d 4000


CR
balance b/d 6000

I dont understand why that 10,000 is at debit side?

sk2022

Hi,

DEAD CLIC is nice and simple to remember

These all go on the debit side

D - Debtors
E - Expenses
A - Assets
D - Drawings

These all go on the credit side

C - Creditors
L - Liability
I - Income (Revenue)
C - Capital

The £10,000 came from the difference of 1st Jan 20X8 - £20,000 but then on 31st Dec 20X8 you have assets of £30,000. So £30,000 - £20,000 = £10,000. Hope this helps you out.