Thread: Need help with understanding debits and credits

Hello I am new here and a new college accounting student.

I really need help in grasping the debits and credits ( using T accounts)
Is there a website that explains this very simply? Or a book for dummies type book you would recommend?
I have totally confused myself and need to understand this...
I understand the basic assets = liabilities + owners Equity

what is the best way to learn which transactions go under each one?

I hope this made sense lol!
Thanks in advance...
Kay

you may want to try to find a tutor. I have found them when I needed them on WyzAnt.com

but you also may want to try and veer away from using the T accounts unless they are still required by your school for assignments. Software is taking over, if not completely, which it should. So it may be in your best interest to start learning software instead of manual accounting techniques.

Kay,

As to debits and credits:

a) debits represent an increase in an asset account or a decrease in a liability or equity account.
b) credits represent a decrease in an asset account or an increase in a liability or equity account.
c) consider the income statement as just a subset of equity

T accounts are very useful tool in clarifying what all takes place with a transaction and in keeping the Accounting Equation (A = L + E) in balance.

Say you bought a product for 750 which was sold for 1000, both were credit transaction and full payment was made by all parties.

Create T accounts for: cash, A/R, Inventory, A/P and Equity/(P&L)

So the entries are:
1) Bought on account - debit inventory 750 credit accounts payable for 750
2) Issued check in payment - debit accounts payable 750 credit cash 750
3) Sold on account - debit A/R 1000 credit sales 1000
4) Received a check in payment - debit cash 1000 credit A/R 1000
5) Adjust inventory to actual - debit cogs (cost of goods sold) 750 credit inventory 750

To summarize the above:
Assets increased 250 (cash); Equity (profit) increased 250; A/R, A/P and Inventory changes each netted to zero (no change).