If you reverse debit and credit, the fault is usually in skipping a question, not in forgetting a rule. A four-question routine prevents that.
This page is for the moment you are at the desk with a transaction and need the entry. For the reasons behind the mix-up, see why debit and credit keep getting reversed.
What is the four-question routine?
Ask these in order, every time, and write the answers down.
- Which two accounts are affected?
- What type is each: asset, liability, capital, income or expense?
- Does each one increase or decrease?
- Use the table: assets and expenses increase by debit, while liabilities, capital and income increase by credit. The opposite side decreases them.
Writing the answers takes about 20 seconds. Going on instinct is quicker, but it is wrong more often.
Worked transactions
These are original transactions for a fictional trader.
Cash sale of RM900. Accounts: cash (asset, increases) and sales (income, increases). Debit cash RM900, credit sales RM900.
Purchase of goods on credit, RM2 000. Accounts: purchases (expense-type, increases) and payables (liability, increases). Debit purchases RM2 000, credit payables RM2 000.
Rent paid by cheque, RM500. Accounts: rent (expense, increases) and bank (asset, decreases). Debit rent RM500, credit bank RM500.
In each case the two entries are equal and opposite. If you ever get a debit and a debit, or a credit and a credit, stop: one of your two answers to question 3 is wrong.
Try one yourself
The owner withdraws RM400 from the bank for personal use. Which two accounts, and which sides?
Answer
Accounts: drawings (reduces capital, so it is debited) and bank (asset, decreases, so it is credited).
Debit drawings RM400, credit bank RM400.
Practise in small rounds
Fifty entries in one sitting will not stick. Do ten a day for five days using the debit-credit transaction trainer, and write the four answers each time. Once the routine feels automatic, you can stop writing the answers and just think them through.
The chapter on deciding debit and credit entries gives more transactions in order of difficulty.
When one-to-one tuition may help
If you follow the routine and still flip entries when the question is long or worded unusually, a teacher can give you live transactions and listen to your reasoning as you go. The cause can be one small misunderstanding, such as how drawings or returns are classified.
See online one-to-one Accounting tuition for how starting works.