What
entry (debit or credit) would you make to: (a) increase revenue (b)
decrease in expense, (c) record drawings (d) record the fresh capital
introduced by the owner.
What entry (debit or credit) would you make to: (a) increase revenue (b) decrease in expense, (c) record drawings (d) record the fresh capital introduced by the owner.
Increase
in revenue
Increase
in revenue is credited as it increases the capital. Capital has
credit balance and if capital increases, then it is credited.
Decrease
in expense
Decrease
in expense is credited as all expenses have debit balance. If expense
decreases, then it is credited.
Record
drawings
Capital
has credit balance; if the capital increases, then it is credited. If
capital decreases, then it is debited. Drawings are debited as they
decrease the capital.
Record
of fresh capital introduced by the owner− credit
Capital
has credit balance, if capital increases, then it is credited. The
introduction of fresh capital increases the balance of capital, and
so, it is credited.
Increase in revenue
Increase in revenue is credited as it increases the capital. Capital has credit balance and if capital increases, then it is credited.
Decrease in expense
Decrease in expense is credited as all expenses have debit balance. If expense decreases, then it is credited.
Record drawings
Capital has credit balance; if the capital increases, then it is credited. If capital decreases, then it is debited. Drawings are debited as they decrease the capital.
Record of fresh capital introduced by the owner− credit
Capital has credit balance, if capital increases, then it is credited. The introduction of fresh capital increases the balance of capital, and so, it is credited.
