Debits & Credits
The two sides of every entry, and which side makes each account grow.
In your head, jot if needed · no calculator why?
Opens at level 22.
Lesson and untimed practice
Read the full lesson and try each skill without a clock. About 3 minutes to read.
skills · practice stats
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Which side increases it? not tried yet
worked example
Which of these accounts would a $1,350 credit increase?
- Owner's draw
- Inventory
- Wages payable
- Wages expense
Answer: Wages payable
- Debits increase assets, expenses, and draws; credits increase liabilities, equity, and revenue.
- Wages payable is a liability, so a credit increases it. Debit just means left side, not bad.
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Pick the entry not tried yet
worked example
A customer pays $2,050 in cash for a service delivered today. Which entry records it?
- Debit Cash $2,050 / Credit Revenue $2,050
- Debit Accounts receivable $2,050 / Credit Revenue $2,050
- Debit Cash $2,050 / Credit Accounts receivable $2,050
- Debit Revenue $2,050 / Credit Cash $2,050
Answer: Debit Cash $2,050 / Credit Revenue $2,050
- Cash (an asset) goes up: debit. Revenue goes up: credit. The service was delivered, so the sale is earned.
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Balance the trial balance not tried yet
worked example
Debit balances: Rent expense $3,400, Inventory $3,200, Accounts receivable $6,100. Credit balances: Revenue ?, Accounts payable $5,100. What must Revenue be for debits to equal credits?
Account Debit Credit Rent expense $3,400 Inventory $3,200 Accounts receivable $6,100 Revenue ? Accounts payable $5,100 Answer: $7,600.00
- Debits total $12,700; the known credits total $5,100.
- The gap is $12,700 − $5,100 = $7,600.
rest ladder
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