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debit/credit rules - student question

debit/credit rules - student question

I have asked this elsewhere but no-one has been able to answer this.. can anyone help here?

I am working through the Woods book to support my course material as has been suggested (by my course material and by my tutor) and it is proving helpful in confirming my knowledge with the exercises.  However there is something that I could do with a little more clarification on.

When deciding whether to debit or credit an account I work on the Debit the receiver and Credit the giver system.... but the Woods book says there are instances where this is not applicable. The book gave a really long method of knowing which to do, but there is no way I am going to remember all that.

To quote:

A number of methods have been suggested in various books to help you make entries to the correct account and some students find them sufficient.  I was taught to debit increases in assets and expenses and to credit increases in income and liabilities, a useful rule, but one that is sadly incomplete.  Another rule often suggested is to debit the receiver and credit the giver; again a useful but sadly incomplete principle to adopt.

But the book doesn't explain why it is incomplete.

Can anyone tell me where do you not debit the receiver and credit the giver?

My tutor couldn't answer the question, she just said she never uses that method.


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By tom123
19th Dec 2011 19:26

So how do journals such as depreciation fit in: There is no receiver or giver.


There is no one easy quick method to learning double entry, although some find it easier to try to concentrate on one side of a type of transaction, which then gives the other by default.


The mnemonic I used was

A ssets                                           C apital

L osses                                           L iabilities

E expenses                                     I ncome

                                                      P rofits


summarised (bit sexist ;( as if you drink too much ALE you  get a CLIP round the ear.


In the end, you will get 'it' and wonder what all the fuss was about,

Good luck


Thanks (1)
to Tim Vane
20th Dec 2011 10:35


tom123 wrote:

So how do journals such as depreciation fit in: There is no receiver or giver.

Tom, your ALECLIP covers all scenarios, however, you ask where does depreciation fit in.

There is a giver/receiver here too.

The asset loses value so is a giver.

The depreciation expense increases so is a receiver.


Thanks (1)
20th Dec 2011 11:51

debit/credit rules

Debit the receiver and Credit the Giver

Debit what comes in and Credit what goes out

Debit all expenses , losses and Credit all incomes and gains

          in the example like depreciation , it is an expense so it will debit 

Thanks (0)
20th Dec 2011 15:36

Easy to remember.....

I always used PEARLS when I was learning as below -


DR                                           CR

Purchases                                Revenue

Expenses                                 Liabilities

Assets                                      Sales




Debtors                                         Creditors

Expenses                                      Liabilities

Assets                                           Income

Drawings                                       Capital

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