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Asked Dec 15, 2019
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When are debits increases? When are debits decreases?

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Expert Answer

Step 1

Debits Increases and Decreases: This forms a fundamental part of understanding of the flow of transactions and the accounting entry process. This is a prerequisite for grasping the concepts of double entry book keeping.

Step 2

Balances of Assets and Expenses for the reporting period increase with debit increases and reduce with debit decreases. The type of balance that an Account has and the increase or decrease in the balance of an account depends on the type of Account. Assets and Expenses have Debit Balances, whereas Liabilities and Incomes have Credit Balances.

 

Hence, we can understand that to increase the balance for an Asset or Expense, we have to debit the Asset or Expense and to decrease the balance of an Asset or Expense, we need to credit the Asset or Expense.

 

In the double entry accounting system, two or more accounts are impacted in each transaction. The increase or Decrease in Debit depends on the impact of the transaction on the balance of the accounts ...

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