Tag Archives: book keeping

Effect created by credits & debits on different account types

I’ve spent quite a bit of time trying to understand how transactions affect accounts. One should remember that the effects of Debit (dr) & Credit (cr) depend on the type of account you are dealing with. For example, receiving money into a bank account, i.e. debiting it, will increase its balance. Whereas, sale of goods, or crediting the sales account, increases its balance. Hope this illustration helps!

Effects on accounts
Effects on accounts