Home » Accounting Explanation » The Double Entry system - Debit and Credit


EXAMPLE No.9

Transaction: Paid salary $5000 to an employee

In this transaction:

1) There are two accounts involved Cash and Salary
2) Types of accounts are Cash=Asset and Salary =Expense
3) There is a decrease in Cash and an increase in Salaries expenses

Therefore, the double entry should be:


  DESCRIPTION DEBIT CREDIT



   Salary expenses   $5000



               Cash   $5000






EXAMPLE No.10

Transaction: Received $4000 as commission from a Firm

In this transaction:

1) There are two accounts involved Cash and Commission
2) Types of accounts are Cash=Asset and Commission =Income/Revenue
3) There is an increase in Cash and Commission income

Therefore, the double entry should be:


  DESCRIPTION DEBIT CREDIT



   Cash   $4000



               Commission income   $4000






EXAMPLE No.11

Transaction: $10,000 withdrawn by owner for his personal use

In this transaction:

1) There are two accounts involved Cash and Drawings
2) Types of accounts are Cash=Asset and Drawings=Capital/Owner equity
3) There is a decrease in Cash and Capital

Therefore, the double entry should be:


  DESCRIPTION DEBIT CREDIT



   Drawings   $10,000



               Cash   $10,000