Trial Balances - Debit or Credit

System
System Posts: 100,534 🤖 Admin 🤖
edited June 18 in AAT student discussion
I am currently studying trial balances, and have come to an activity which listed accounts and figures, and told me to put them into a trial balance. However, I could not see how to distinguish what were debits and what were credits? Is it determined on whether they are an asset, purchase etc?<BR><BR>I'm a little confused, please could somebody enlighten me?<BR><BR>Thanks (it's late on a Friday - should I be doing this?!!!!)

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  • System
    System Posts: 100,534 🤖 Admin 🤖
    Trial Balances - Debit or Credit

    deadclic<BR>debit<BR>expenses<BR>assets<BR>drawings<BR><BR>credit<BR>liabilties<BR>income<BR>capital<BR><BR>they should all fall into these catagories
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Trial Balances - Debit or Credit

    Our tutors have taught us to put them in a certain order using an 'actostic' RECAL.<BR><BR>R= Revenue (Sales, rent received, bank interest etc. any money coming in)<BR><BR>E= Expenses (Telephone, rent, rates etc.)<BR><BR>C= Capital (Self explanatory)<BR><BR>A= Assets (Anything such as premises, machinery, vehicles, and debtors, cash (and bank if there is money in it)<BR><BR>L= Liabilities (Loans, overdraft, creditors etc. - anything the business owes.<BR><BR>The entries are always<BR> <BR>Revenue= CREDIT<BR>Expenses=DEBIT<BR>Capital= CREDIT<BR>Assets= DEBIT<BR>Liabilities= CREDIT<BR><BR>They should always be as above in the trial balance ie liabilites should always be a credit entry etc.and so on.<BR>Hope your exam goes well!
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Trial Balances - Debit or Credit

    no offence love but deadclic seems alot easier to remember
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Trial Balances - Debit or Credit

    I find this the easiest way to remeber DR'S and CR<BR><BR>Assets<BR>Losses<BR>Expenses<BR>Drawings<BR><BR>Capital<BR>Liability<BR>Income<BR>Profit<BR><BR>All the best with your revision!
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Trial Balances - Debit or Credit

    Just remember the classic PEARLS<BR><BR>P urchases = Debit <BR>E xpenses = Debit <BR>A ssets = Debit<BR><BR>R evenue = Credit<BR>L iabilities = Credit<BR>S ales = Credit<BR><BR><BR>Things to remember as well<BR><BR>Purchase Ledger control = Credit (opposite side to purchases)<BR>Sales Ledger Control = Debit (opposite side to sales)<BR>Petty Cash = Always debit because you can not owe the petty cash money <BR><BR>Hope this helps

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