DEBIT AND CREDIT

AMDG
 ACCOUNT
An accounting device used to
summarize the increases and
decreases in the asset, liability,
capital, income and expenses of
the business

AMDG
 T-ACCOUNT
A simple form of account which
looks like a big letter “T”. It has a
left side and a right side
Name of the Item

Left side Right side

AMDG
 • The left side of a T-account is the DEBIT(Dr.) side
• The right side is CREDIT (Cr.) side

Name of the Item

DEBIT / Dr. CREDIT /Cr.
Left side Right side

AMDG
 DEBIT / Dr. to: CREDIT /Cr. to:

1. Increase assets 1. Decrease assets

2. Decrease liabilities 2. Increase liabilities
3. Decrease capital due 3. Increase capital due
to: to:
a. Withdrawal of assets a. Investment by the
by the owner owner
b. Increase in expenses b. Decrease in expenses
and losses and losses
c. Decrease in income c. Increase in income

AMDG
 Nov. 1 – M. Rogers opened a
catering service he called
“McRogers”. He invested P115,000
cash and equipment P85,000.
DEBIT CREDIT
Cash P 115,000 Rogers, Capital P200,000
Equipment 85,000

Analysis:
1. The assets and the capital are affected.
2. The owner put in the business cash and equipment,
thus increasing the assets and increasing the
capital. AMDG
 Nov. 3 – He purchased kitchen
utensils, tools, and additional
equipment from Kent Trading on
credit, P60,000.
DEBIT CREDIT
Kitchen Equipment P 85,000 Accounts Payable – Kent
Trading P200,000

Analysis:
1. The assets and the liabilities are affected.
2. Assets, tools, and equipment are bought by the
owner on credit basis, thus increasing the assets
and liabilities. AMDG
Nov. 7 – Paid for the
advertisement announcing the
opening of his business, P15,000
DEBIT CREDIT
Advertising Expense P15,000 Cash P15,000

Analysis:
1. The assets and the capital are affected.
2. The capital is decreased due to the advertising
expense incurred and the asset, cash, is decreased
for payment of the said expense.
AMDG
 Nov. 9 – Paid one-half of the
account due to Kent Trading.
DEBIT CREDIT
Accounts Payable – Kent Cash P30,000
Trading P30,000

Analysis:
1. Assets and liabilities are affected.
2. There is a decrease in liability due to the partial
payment of the account to Kent Trading and also a
decrease to cash for the amount paid.

AMDG
Nov. 11 – Rendered a catering
service to N. San Juan for his son’s
wedding and received cash of
P52,000
DEBIT CREDIT
Cash P 52,000 Service Income P 52,000

Analysis:
1. The assets and the capital are affected.
2. Cash is received thus asset increased and the
capital is increased due to the revenue derived
from service rendered.
AMDG
Nov. 13 – Paid for the food
supplies used in San Juan’s
wedding party, P25,000
DEBIT CREDIT
Food Supplies P25,000 Cash P25,000

Analysis:
1. The assets and the capital are affected.
2. The capital is decreased due to the cost of food
supplies and cash is also decreased for the
payment.
AMDG
 Nov. 17 – Billed to J. Estrada the
amount of P 25,000 for catering
service rendered in his birthday
party.
DEBIT CREDIT
Accounts Receivable – Service Income P25,000
Estrada P25,000

Analysis:
1. The assets and the capital are affected.
2. Capital is increased due to the revenue from
services rendered and asset is increased for the
claims from the customer. AMDG
 Nov. 20 – Paid the salary of the
assistant cook, P5,000
DEBIT CREDIT
Salaries Expense P5,000 Cash P5,000

Analysis:
1. The assets and the capital are affected.
2. The proprietorship is decreased due to salary
expense incurred by the business and cash is
decreased for the payment.

AMDG
 Nov. 22 – Received from J.
Estrada the amount of P10,000
as partial payment of the
account due from him
DEBIT CREDIT
Cash P10,000 Accounts Receivable – J.
Estrada P10,000
Analysis:
1. Only assets are affected.
2. Cash is received from a customer therefore
increasing assets and decreasing the receivable
from said customer.
AMDG
Nov. 25 – Withdrew P5,000 for
his personal use.
DEBIT CREDIT
Rogers, Drawing P5,000 Cash P5,000

Analysis:
1. The assets and the capital are affected.
2. The capital is decreased due to the drawing made
by the owner.

AMDG
END

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