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Debit and Credit Rules

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

D E A D C L I C
This acronym stands for Debit Expenses, Assets and Drawings, and Credit Liabilities, Income and Capital.

Account GroupAccount
Value
Increase
Account
Value
Decrease
Balance
Assets
  • A/R
  • Cash
DRCRDR
Liabilities
  • Deposits
  • Taxes Due
  • Prepaid Sales
CRDRCR
Owner EquityCRDR
Revenue
  • Sales
CRDRCR
Expenses
  • Discounts
DRCRDR

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.

Remember also that every 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 transaction page.

Source: "Debits and Credits Rule"; AccountingTraining.co.nz; http://www.accountingtraining.co.nz/general-accounting/debits-and-credits/; accessed 4-12-2018

VetView Wiki

Most recent releases of VetView:  Version 4.2.5 Hotfix (Released 10/31/2024)

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

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