Check sibling questions
Accounts and Finance
Step 1 Basic of Accounts - Debits and Credits

In Accounts,there are only 2 things

  1. Profit and Loss- Containing Expenses and Incomes
  2. Balance Sheet-Containing Liabilities and Assets



Rules for Accounting

All Expenses- Debit

All Incomes- Credit

All Liabilities- Credit if Increase (Debit if Decrease)

All Assets- Debit if Increase (Credit if Decrease)


If we know these rules, our no entry will be wrong

Profit and Loss






Balance Sheet



Cr (Increase)



Cr (Decrease)




Example 1:-

Internet Bill received from Reliance of Rs 2000

View Answer

Example 1 Continued

Suppose Amount paid to Reliance by Cash 2000

View Answer

Entry 2

Machine purchased from AB Technologies 50000

Amount paid by cheque

View Answer

Example 3

Sales made to Max and Co Rs 30000.

Amount received by NEFT (National Electronic Fund Transfer i.e. amount received directly in bank account)

View Answer
Davneet Singh's photo - Teacher, Engineer, Marketer

Made by

Davneet Singh

Davneet Singh is a graduate from Indian Institute of Technology, Kanpur. He has been teaching from the past 12 years. He provides courses for Maths and Science at Teachoo.