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  • Rules of Debit and Credit

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    Masood Ahmad Aadam
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    The document summarizes the rules of debit and credit for accounting under both the American and British approaches. Under the American approach, it lists common account types and their normal balances and whether debits and credits increase or decrease them. It also defines contra accounts. Under the British approach, it distinguishes between personal accounts for natural, collective, and statutory persons and impersonal accounts that are either real or nominal. It provides the rules for debit and credit for each type of impersonal account.

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    Basic rules of Debit and Credit of Accounting for Business Financial Statement

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    The document summarizes the rules of debit and credit for accounting under both the American and British approaches. Under the American approach, it lists common account types and their normal balances and whether debits and credits increase or decrease them. It also defines contra accounts. Under the British approach, it distinguishes between personal accounts for natural, collective, and statutory persons and impersonal accounts that are either real or nominal. It provides the rules for debit and credit for each type of impersonal account.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Flag for inappropriate content
    Download as pdf or txt
    164 views1 page

    Rules of Debit and Credit

    Uploaded by

    Masood Ahmad Aadam
    The document summarizes the rules of debit and credit for accounting under both the American and British approaches. Under the American approach, it lists common account types and their normal balances and whether debits and credits increase or decrease them. It also defines contra accounts. Under the British approach, it distinguishes between personal accounts for natural, collective, and statutory persons and impersonal accounts that are either real or nominal. It provides the rules for debit and credit for each type of impersonal account.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
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    of 1

    CSS Accountancy & Auditing Adams Learning Centre, Lahore

    Rules of Debit & Credit (American Approach)


    Account Type Normal Balance Increase Decrease
    1 Assets Debit Debit Credit
    2 Liabilities Credit Credit Debit
    3 Capital (Equities) Credit Credit Debit
    4 Incomes Credit Credit Debit
    5 Expenses Debit Debit Credit

    Contra Asset Credit Credit Debit


    Contra Liability Debit Debit Credit
    Contra Capital Debit Debit Credit

    Rules of Debit & Credit (British Approach)


    Accounts

    Personal Accounts Impersonal Accounts

    1. Natural Person
    2. Collective Person
    3. Statutory/Legal Person

    Rule: Real Accounts Nominal Accounts

    Who Receives ------- Dr. Rule: Rule:

    Who Gives ---------- Cr. What Comes in Business ------- ------ Dr. Expenses --------- Dr.

    What goes out from Business -------- Cr. Incomes ---------- Cr.

    1|Page By: Prof. Asif Masood Ahmad


    0321 9842495

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