Debits & Credits and Journal Entries

This useful chart will help you make Journal Entries.  Look up your account type and then find either increase or decrease next to your account type.  Then look up the column to see if you should debit the account or credit it.


Category Debit Credit
Assets Increases Decreases
Liabilities Decreases Increases
Retained Earnings Decreases Increases
Income Decreases Increases
Cost of Goods Sold Increases Decreases
Expenses Increases Decreases


Cost of Good Sold – is an expense that relates directly to the business completing a sale.  If you did not incur this expense the sale would not be completed.

Expenses – are expenses that do not relate to a completion of a sale.  IE: Utility Bills


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