T accounts game (Credits and debits)

Debits and Credits

Account Debit (Dr).. Credit (Cr) permanent Accounts Assets Increase Decrease Liabilities Decrease Increase Equity Decrease Increase Temporary Accounts Expenses Increase Decrease Revenue Decrease Increase Get the debits and credits. If a value is placed into the credit column of the assets account, it will decrease the total value of that account. If a value is placed into the debit column of the expenses account the total of that account will increase

For example use a simple business transaction to see this in action: on four April Mr. Jones bought a box of copy paper for the office costing $15.00 using a business check/cheque. Following the double entry rules, two bookkeeping ledger accounts will be affected

In the books we want to show that money has gone out of the bank account thus decreasing the bank stationery account - the money has been used to buy a stationery item thus increasing the expenses balance. $15.00 has been placed on the left side of the stationery ledger account and on the right side of the bank ledger account. T ledger liability and equity accounts will have an opening balance at the beginning of a new financial year. These balances are the closing balances brought forward from the previous financial balances in the asset accounts are usually liabilities and equity balances are usually the above ledger, the bank ledger has an opening balance of $1,050.00. This means that at the end of the previous financial year this business had that much money in their bank revenue and expenses accounts are always cleared at the end of a financial year so they start the new year with a zero balance.