62f3a49ceccc92ab7efc6a8ee6baf0f3.doc

62f3a49ceccc92ab7efc6a8ee6baf0f3.doc - Reviewing...

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Reviewing Debit Credit Rules Decision Process Step 1 : Pick ONE account that is affected by the transaction Step 2 : Is this account you picked in Step 1 INCREASING or DECREASING? Step 3 : What type of account is this? CHOICES Assets – something that has future economic benefit – Cash, Accounts Receivable, Inventory, Prepaid Insurance, Equipment, etc. Liabilities – a debt owed to others – Accounts Payable, Unearned Revenue, Notes Payable, Bonds Payable, Long term Mortgage Payable Equity – Capital, Common Stock, Retained Earnings Revenues – Sales Revenue, Service Revenue, Sales Expenses – Cost of Goods Sold, Salaries Expense, Insurance Expense Drawings/Dividends – these are dividends that the company has declared and has, or will, pay to its owner(s)/stockholders Step 4 : Combine your answer from Step 2 and Step 3 to find whether you DEBIT or CREDIT the
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