What are the rules for debit and credit related to following

What are the rules for debit and credit related to following accounts
a)Asset account
b)capital account
c)liabilities account
d)Reveneue account

Note:please don\'t answer, if you don\'t know. Will give down thumb if answered wrong

Solution

Answer : It is modern approach of accounting where the rules of debit and credit are :

A: ASSET ACCOUNT :

RULE OF ASSET ACCOUNT : \" DEBIT THE INCREASE CREDIT THE DECREASE\"

When there is increase in the amount of an asset, the asset should be debited where as when there is a decrease in the value of an asset ,it should be credited.

Example of Increase in Asset : A business purchased a machineary of $50,000

B . CAPITAL ACCOUNT :

RULE OF CAPITAL ACCOUNT : \" CREDIT THE INCREASE DEBIT THE DECREASE\"

When there is increase in the amount of capital , the capital account should be credited where as when there is decrease in the amount of capital, the capital account should be debited.

Example of Increase in the capital : The owner of the business bring additional capital in the business.

C. LIABILITIES ACCOUNT :

RULE OF LIABILITIES ACCOUNT : \" CREDIT THE INCREASE DEBIT THE DECREASE\"

When there is increase in the amount of Liability , the liability account should be credited where as when there is decrease in the amount of liability, the liability account should be debited.

Example of Increase in liability : Goods purchased on credit from supplier than there is increase in creditors.

D . REVENUE ACCOUNT :

RULE OF REVENUE ACCOUNT : \" CREDIT THE INCREASE DEBIT THE DECREASE\"

When there is increase in the amount of revenue , the revenue account should be credited where as when there is decrease in the amount of revenue, the revenue account should be debited.

Example of Revenue Account : Good sold on cash $20,000