AWE LOR

A = Assets L = Non-shareholders' Liabilities

W = Withdrawals O = Owners' Equity orShareholders' Liabilities
E = Expenses R = Revenue

AWE Increases with debits Assets Increase with Debits and Decrease with Cre
Decreases with credits Liabilities increase with credits and decrease with

LOR Increases with credits
Decreases with debits
Withdrawals are funds taken out by the owners'
If funds are withdrawn the business owes less
to the owners
Therefore withdrawals increase with debits and de
Expenses
For a given revenue the higher the expenses the
less is owed to shareholders
Expenses increase with debit and decrease with cr
For a given expense figure the higher the revenue
The more the business owes to the shareholders
So revenues increase with credits and decrease wi
 Debits and Decrease with Credits
ith credits and decrease with debits

ds taken out by the owners'

wn the business owes less

als increase with debits and decrease with cerdits

the higher the expenses the

ith debit and decrease with credits

figure the higher the revenue
ss owes to the shareholders
e with credits and decrease with debits
Tata Steel Shyam pays 250,000
cannot pay the balance
Sold Goods worth Rs 500,000 to Shyam and Co.
Shyam and Co. paid 200,000 be cheque
Balance due after 1 month

Credit Sales 500,000

Debit Cash 200000
Debit Shyam 300000

Shyam pays 300,000 debit cash 300000 Debit cash 250000

credit shyam 300000 Debit Bad Debts 50000
Credit Syam 300000
Paid 300,000 by way of Wages
Insurance Premium for January to December 2020 = 120,000
Debit Wages 300,000 Paid in Cash
Credit Cash 300,000
31 March 2020 What will come on the B/S
Dividends declared 500,000
Dividends paid 200,000 Cash Credit 120000 Goods worth 250,000 sold on credit
Insurance Debit 30000 to Ravi
Dividends Expense Debit 500,000 Expense Subsequently returned goods worth
Cash Asset Credit 200000 Prepaid Debit 90000 30,000
Dividends Outstanding Insurance
Liability Credit 300000 Sales Credit 250000
Ravi Debit 250000
Gross Book Value on 1 April 2,000,000
Accumulated Deptreciation on 1April 300,000 Sales Returns debit
Depreciation for the year = 125,000 Ravi Credit

Starting NBV = 2000000 - 300000 1700000

Accumulated Depreciation 425000
Ending NBV 1575000

Issue Bonds worth 2500000 LTD Credit 2500000

Cash Debit 2500000

Bought goods worth 300000 from Gupta Purchases Debit 300000

Paid 100,000 in cash balance is due Cash Credit 100000
Gupta Credit 200000
Shares with a FV of Rs 10 were issued at Rs 25 each
# of shares issued = 100000

Cash Debited 2500000

Share
Capital Credited 1000000
Share
Premium Credited 1500000
rth 250,000 sold on credit

ntly returned goods worth

30000
30000