Accounting

samapp

I am stuck between double entry bookeeping and Just simple transactions for cash.

I am john and I give mary 100.

How do I know if I credit mary because I am the giver or debit her because she is the receiver.

andyman

Right, let's just say your account is your Bank A/C and Mary's account is called the Mary A/C

Bank A/C you debit Mary, because Mary has recieved the sum. Mary A/C you credit Bank, because Bank has given Mary the sum. Remember each transaction appears twice in the books. One debit, one credit.

I'm pretty sure that's right, Double Entry Book-keeping was never my strong point although I'm getting it a bit more now. Open to correction of course

SmashingPilot

You would put the figure in John's a/c on the credit side as his account is paying/decreasing. The figure in Mary's a/c will go on the debit side as she is receiving the money. For every credit there must be a debit.

Here is a little rule I learned which helped a lot for accounting.

You always debit the following: Asset increasing, liability decreasing and income.

You always credit the following: Asset decreasing, liability increasing and expenses.

I think thats right anyways. lol!!! I only did the leaving in June and already forgotten. :pac::pac: