India How to Learn Journal Entries.

[Inderpal Singh]

Hello There,

What are the easiest way to prepare or remember the journal entries. What to be Debited and what to be credited. Is there any trick or formula

 

[Steve-LevelUp]

I'm not sure exactly what you mean, but I like to think of everything in terms of cash. From there, I know that I need to debit cash to increase it. That's my trick. If there is ever an entry that I need to work out and the direction is uncertain, I think about the impact on cash and that usually gives me the answer that I need.

 

[Fidget]

The trick I learned was to simply:

* Always debit the account that receives goods, services or money;
* Always credit the account that gives goods, services or money.

 

[King Sitaw]

To increase:
Debit Asset
Credit Liabilities
Credit Equity

To decrease:
Credit Asset
Debit Liabilities
Debit Equity

You can use the T - account.

 

[DuffNStuff]

I've always used ADE/LER

Increases by Debit Increases by Credit
(A)Assets (L)Liabilities
(D)Draw (E)Equity
(E)Expenses (R)Revenue

 

[kumbaya]

Hello There,

What are the easiest way to prepare or remember the journal entries. What to be Debited and what to be credited. Is there any trick or formula

There is no easy method other than learning basics of what a debit and credit is. Assets are debits and liabilities are credits and then incomes are credits and the expenses are debits- it is this simple. If you know how to define assets , liabilities, income and expenses ( guided by accounting standards) then this method works with no extra effort.Once you get it , it lasts for the rest of your life - there is no other method I know of easier than this.

 

[Victor Shah]

There are mainly three types of accounts.
1. Real Account - Assets & Liabilities - Cash, Inventory, Loan, etc
2. Personal Account - Bank, Creditor (Vendor), Customer (Debtor), i.e. Accounts Payable, Accounts Receivable
3. Nominal Account - Expenses, Loss, Gains, Income accounts

There is one golden rule for each type of account
1. Real Account - Debit what comes in and Credit what goes out
2. Personal Account - Debit the Receiver and Credit the Giver
3. Nominal Account - Debit all expenses & losses; Credit all incomes and gains