Accounts Rules for Double Entry

-When increasing an asset account we make a debit entry.

-When decreasing an asset account we make a credit entry.

-When increasing a capital/liability account we make a credit entry.

-When decreasing a capital/liability account we make a debit entry.

 Illustration of basic accounting entries

2009

June 1    Owner started business ‘ToyWare’ with $5,000 cash in hand.

June 5    The business borrowed $10,000 cash from C.Wuggot.

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