MGT101 Assignment#01 Solution Spring 2013
See the attached please
Please correct if i am wrong
- Rules of debit and credit are as under:
Increase in asset is debit
Decrease in asset is credit
Increase in expense is debit
Decrease in expense is credit
Increase in income is credit
Decrease in income is debit
Increase in liability is credit
Decrease in liability is debit
Increase in capital is credit
Decrease in capital is debit
Decrease in asset is credit
Increase in expense is debit
Decrease in expense is credit
Increase in income is credit
Decrease in income is debit
Increase in liability is credit
Decrease in liability is debit
Increase in capital is credit
Decrease in capital is debit
- What are the rules for debit and credit in accounting?
There are three Golden Rules for Debit & Credit, whole accounting is depend on these three rules :- 1. Debit what comes in & Credit what goes out. 2. Debit the receiver & Credit the giver. 3. Debit all loss/expenses & Credit all gains/profits. Regards Jawad
increase in asset is debit & decrease in asset is credit
increase in asset is debit & decrease in asset is credit
The above rules do not always apply, It is not as simple as Debit is what comes in and Credit is what goes out. If you pay a bill, yes you "Credit" the cash that is going out, but you also Debit the expense account (the opposite side).
The basic rules are, for every Debit there must be an equal Credit and (of course) for every Credit there must be an equal Debit. Debits and Credits MUST BALANCE, ALWAYS!
The terms Debit and Credit literally mean
Debit = Left side of the accounting columns
Credit = Right side of the accounting columns
Credit = Right side of the accounting columns
Also look at Revenue, if you GET money for doing a job or selling a product, there are TWO Sides that must Equal, if you receive cash you (Debit) Cash, but at the same time you must also (Credit) Income (Revenue).
Assets increase with a Debit (as do expense accounts)
Liabilities increase with a Credit (as do Owners Equity or Capital accounts)Permalink Reply by
Liabilities increase with a Credit (as do Owners Equity or Capital accounts)Permalink Reply by
Date | Accounts Involved | Debit Rs. | Credit Rs. |
| |
March 01 | Bank Capital | 900,000 | 900000 | Increase in asset a/c Increase in owner’s equity a/c | |
March 01 | Advance rent bank | 90,000 | 90,000 | Increase in asset a/c Decrease in asset a/c | |
March 01 | Equipment Cash Ammar rental | 280,000 | 170,000 110,000 | Increase in asset a/c Decrease in asset a/c Increase in liability a/c | |
March 04 | Office supplies Office furniture Asher & co. | 5000 50,000 | 55,000 | Increase in asset a/c Increase in asset a/c Increase in liability a/c | |
March 08 | Cash Rent received | 10,000 | 10,000 | Increase in asset a/c Increase in income a/c | |
March 10 | M/S ABC Rent | 5000 | 5000 | Increase in asset a/c Increase in income a/c | |
March 17 | Repairing & maintenance cash | 3400 | 3400 | Increase in expense a/c Decrease in asset a/c | |
March 27 | Bank charges Bank | 150 | 150 | Increase in expense a/c Decrease in asset a/c | |
March 30 | Bank M/S ABC | 10,000 | 10,000 | Increase in asset a/c Decrease in asset a/c | |
March 31 | Salaries cash | 3600 | 3600 | Increase in expense a/c Decrease in asset a/c |
Date | Accounts Involved | Debit Rs. | Credit Rs. |
| |
March 01 | Bank Capital | 900,000 | 900000 | Increase in asset a/c Increase in owner’s equity a/c | |
March 01 | Advance rent bank | 90,000 | 90,000 | Increase in asset a/c Decrease in asset a/c | |
March 01 | Equipment Cash Ammar rental | 280,000 | 170,000 110,000 | Increase in asset a/c Decrease in asset a/c Increase in liability a/c | |
March 04 | Office supplies Office furniture Asher & co. | 5000 50,000 | 55,000 | Increase in asset a/c Increase in asset a/c Increase in liability a/c | |
March 08 | Cash Rent received | 10,000 | 10,000 | Increase in asset a/c Increase in income a/c | |
March 10 | M/S ABC Rent | 5000 | 5000 | Increase in asset a/c Increase in income a/c | |
March 17 | Repairing & maintenance cash | 3400 | 3400 | Increase in expense a/c Decrease in asset a/c | |
March 27 | Bank charges Bank | 150 | 150 | Increase in expense a/c Decrease in asset a/c | |
March 30 | Bank M/S ABC | 10,000 | 10,000 | Increase in asset a/c Decrease in asset a/c | |
March 31 | Salaries cash | 3600 | 3600 | Increase in expense a/c Decrease in asset a/c |
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