Rules of Debit and Credit

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<h3>Expenses</h3>
<p> &#160;</p>
<ul>
<li>An increase in expenses will be debited. </li>
</ul>
<p> For example: Paid rent expense for the month in cash Rs. 6000</p>
<p> &#160;</p>
<p> <a href="http://mba-lectures.com/wp-content/uploads/2010/07/image5.png"><img title="image" style="border-top-width: 0px; display: inline; border-left-width: 0px; border-bottom-width: 0px; border-right-width: 0px" height="84" alt="image" src="http://mba-lectures.com/wp-content/uploads/2010/07/image_thumb5.png" width="450" border="0" /></a> </p>
<p> &#160;</p>
<h3>Sales Return</h3>
<p align="justify">&#160;</p>
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<p align="justify">
<p align="justify">When a company sells goods to customers and the customers return goods to the company because of any defect, then such goods are sales return. Sales return is always debited. </p>
<p align="justify">
For example: George sold goods for Rs. 8000 but the goods were returned back by the customer. </p>
<p align="justify">&#160;</p>
<p align="justify"><a href="http://mba-lectures.com/wp-content/uploads/2010/07/image6.png"><img title="image" style="border-top-width: 0px; display: inline; border-left-width: 0px; border-bottom-width: 0px; border-right-width: 0px" height="144" alt="image" src="http://mba-lectures.com/wp-content/uploads/2010/07/image_thumb6.png" width="450" border="0" /></a> </p>
<p align="justify">&#160;</p>
<h3>Purchases Return</h3>
<p align="justify">&#160;</p>
<p align="justify">
<p align="justify">Sometimes, company purchase goods which are not according to their specification or contain some defects due to which company returns the goods to the seller. Such goods are called purchases return and they are always credited. </p>
<p align="justify">
For example: Steve purchased goods for Rs. 7000 but returned them back because they were damaged.&#160; </p>
<p> &#160;</p>
<p> <a href="http://mba-lectures.com/wp-content/uploads/2010/07/image7.png"><img title="image" style="border-top-width: 0px; display: inline; border-left-width: 0px; border-bottom-width: 0px; border-right-width: 0px" height="135" alt="image" src="http://mba-lectures.com/wp-content/uploads/2010/07/image_thumb7.png" width="450" border="0" /></a> </p>
<p> &#160;</p>
<h3>Income</h3>
<p align="justify">&#160;</p>
<p align="justify">
<p align="justify">Whenever the company earns profit, the amount of profit is always recorded on the credit side of journal. </p>
<p align="justify">&#160;</p>
<p align="justify"><a href="http://mba-lectures.com/wp-content/uploads/2010/07/image8.png"><img title="image" style="border-top-width: 0px; display: inline; border-left-width: 0px; border-bottom-width: 0px; border-right-width: 0px" height="79" alt="image" src="http://mba-lectures.com/wp-content/uploads/2010/07/image_thumb8.png" width="450" border="0" /></a> </p>
<p> &#160;</p>
<h3>Losses</h3>
<p>&#160;</p>
<p> Whenever a company incurs loss, the amount of loss is always recorded on the debit side of journal.</p>
<p> &#160;</p>
<p> <a href="http://mba-lectures.com/wp-content/uploads/2010/07/image9.png"><img title="image" style="border-top-width: 0px; display: inline; border-left-width: 0px; border-bottom-width: 0px; border-right-width: 0px" height="77" alt="image" src="http://mba-lectures.com/wp-content/uploads/2010/07/image_thumb9.png" width="450" border="0" /></a>
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