Q2. Debits and credits
What are debits and credits?
(1) Debit refers to the left side of the accounting equation.
(2) Credit refers to the right side of the accounting equation.
(3) Accounting equation shows on which side the assets, liabilities, equity, revenues and expenses are recorded.
(4) Accounting Equation
Assets + Expenses = Liabilities + Equity + Revenues
a. Assets are debit accounts.
b. Expenses are debit accounts.
c. Liabilities are credit accounts.
d. Equity accounts are credit accounts.
e. Revenues are credit accounts.