Is capital a debit or credit?
|Accounting Element||Normal Balance||To Decrease|
Is rent a debit or credit?
|Account Type||Increases Balance|
|Revenue: Revenue is the money your business is paid for the sale of products and services||Credit|
|Expenses: Expenses are considered the cost of doing business and include things such as office supplies, insurance, rent, payroll expenses, and postage||Debit|
Why revenue is credit? In bookkeeping, revenues are credits because revenues cause owner’s equity or stockholders’ equity to increase. Recall that the accounting equation, Assets = Liabilities + Owner’s Equity, must always be in balance.
Is drawings credit or debit? An account is set up in the balance sheet to record the transactions taken place of money removed from the company by the owners. This is known as the ‘drawing account’. In the drawing account, the amount withdrawn by the owner is recorded as a debit. If goods are withdrawn, the amount recorded is at cost value.