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Debits and Credits Rules

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Quite simply there are 5 account types and each one can go up or down as follows.

D E A D C D C L I C
This acronym stands for:

Debit

Expenses, Assets and Drawings, and Credit Liabilities, Income and Capital.

Expenses, Assets and Drawings; and,
Credit Liabilities, Income and Capital.

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Account Group	Account Value Increase	Account Value Decrease	Balance
Assets A/R Cash External Cash (for Internal Refunds and A/R Payments)	DR	CR	DR
Contra Asset	CR	DR	CR
Liabilities Deposits Taxes Due Prepaid Sales	CR	DR	CR
Contra Liabilities	DR	CR	DR
Owner (Stockholders') Equity	CR	DR	CR
Owner's Drawing or Dividends Account	DR	CR	DR
Revenue (Income) Sales Gains	CR	DR	CR
Contra Revenue Sales Returns Sales Allowances Sales Discounts	DR	CR	DR
Expenses Discounts Losses	DR	CR	DR

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You apply this DEAD CLIC rule if an account goes up in value. If an account goes down in value, you apply the opposite. In other words, if an expense increases in value, then you debit the account (because the DEAD CLIC rule says to Debit Expenses). If an expense decreases in value, then you credit the account.

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You apply this DEAD CLIC rule if an account goes up in value. If an account goes down in value, you apply the opposite. In other words, if an expense increases in value, then you debit the account (because the DEAD CLIC rule says to Debit Expenses). If an expense decreases in value, then you credit the account.

Account GroupAccount
Value
IncreaseAccount
Value
DecreaseBalanceAssets

A/R
Cash

DRCRDRLiabilities

Deposits
Taxes Due
Prepaid Sales

CRDRCROwner EquityCRDRRevenue

Sales

CRDRCRExpenses

Discounts

DRCRDR

Note
Remember also that every financial transaction affects two accounts, one is a debit, the other a credit. This is why we call it double entry (not single entry) bookkeeping. Refer to the T-account examples below, and on each Business Transaction page.

Source: "Debits and Credits Rule"; www.accountagility.co.nz; https://www.accountagility.co.nz/accounting/debits-and-credits/; accessed 2-11-2020

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To see commonly used terms in VetView Hospital, please visit our Hospital Glossary of Terms

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title	Definitions

Refer to the 'Inventory and Accounting Definitions' wiki page for the definition of inventory and accounting terms, and for details about fields and controls.

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Debits and Credits Rules

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