Debit credits

Please can someone help keep with debits credits it has completely smashed my head a carnt get my head round them

Answers

  • fedemenni
    fedemenni MAAT, AATQB Posts: 95
    DEAD CLIC

    debits: expenses, assets, drawings on one side and credits: capital, liabilities, income, on the other side
    amurray
  • amurray
    amurray Feels At Home Registered, MAAT, AATQB Posts: 304 🎆 🐘 🎆
    edited December 2019
    I learnt DEAD CLIC which was fantastic.... but I was also informed of another one: PEARLS.

    PEA = Purchases, Expenses, Assets – Debits

    RLS = Revenue, Liabilities, Sales – Credits
    MAAT, AATQB, FIAB, MICB PM.Dip.
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  • Pian32
    Pian32 MAAT Posts: 473 Dedicated contributor 🌟 🐵 🌟
    I think the other way of thinking about it is: Has the money gone to something or come from something. (from the business perspective)

    Taking DEADCLIC which is what I was taught initially.
    You put money into an expense to pay it.
    You put money into your assets to store it (banks, FAs etc)
    You put money into the owners drawings.

    You take money from a lender (Liabilities)
    You take in income
    You get capital from the owner.

    This also means when you reverse one of those like pay a loan you put money into the loan on the debit side.
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