A debit and credit cheat sheet is a piece of written paper based on the accounting equation. It is kept double-entry accounting for balancing the account system. With every debit entry to a ledger, there should be an equal credit to another ledger of single transaction.
Actually the main objective of the cheat is to serve as an aid to understand accounting entry, it may the debits and credits for a transaction. To understand the debits and credits in terms of accounting entry, you have to understand basic accounting rules. Even the debits and credits cheat sheet also based on the double-entry rules.
|Accounts||Debit will –||Credit will –|
|Types of Accounts||To Increase||To Decrease|
Explanation – Double entry accounting
As you can see above both examples are according to double entry accounting. Typically, double entry accounting has a simple formula:
Assets = Liabilities + Equity.
But its makes confusion, that needs to clarifying as below:
The business start with its own finance $10000,
The equation would be, Assets = Equity ($10000) + Liability ($ 0)
Business takes loan of $ 5000,
it will be Assets ($15000) = Equity ($10000) + Liability ($ 5000),
In case, business pays for salary $200,
Assets ($14800) = Equity ($10000-200=$9800) + Liability ($5000)
Mean it, when business borrowed any loan also consider as assets, but it is liability.
Debits and Credits
Simply, the debits and credits entry is essential part of the accounting system. In this system, the entries should be made as debits for account 1 and credits for account 2 to balancing for single transaction.
If any business buys any equipment with $ 1200 with cash payment. Then the accounting system will be made double entry for this transaction to detailing as:
Account Name Debit Credit
Equipment (Asset) $1200
Mean it, Assets will be increase, and cash will be decrease make balance the accounts. As Standard Accounting entry terms – “Debit” made in left column, and “Credit” at on right side.
The Assets & Expenses – The Accounting Entry at debit side indicates – increase in the account balance.
The liabilities, income, equity – when its increase the record will be made in the credit column.
You can make the debit and credit cheat sheet. This cheat sheet will be make clear the entire part of the accounting entry system.
Benefits of use the debit and credit cheat sheet
There are numbers of benefits to using the cheat sheet, typically for the learning process of basic accounting process. The cheat sheet may focus on basic accounting rules, mostly double-entry as well makes more valuable information with single sheet.
To study basic accounting – double-entry
If you are learning the accounting system may be you needs a read and collect the information for to understand the bookkeeping for double entry. But better way is to review the cheat sheet which having an all the information which require to understand for debits and credits for accounting.
Actually, the cheat sheet users are mostly accounting students. This sheet will be help during the example and it is much convenient tool for reviewing. Students can use the cheat sheet to quick and easy reviews the double-entry processes, as well ledger effects on the accounts. Even more, it may be helpful for the student to makes the quick observations. It can be time saver for students.
If you have a specific and unique information about the accounting basics, as well cheat sheet which may provide sufficient information can increase the level of confident. When you are going to make the entries of the transactions, you will be much confidently entering the values and transactions easily.
Sample template of Debits and credit cheat sheet
The debit-credit cheat sheet is usually for a study. This cheat sheet works as guide for student with specific summarized information of double entry accounting. If the student knows about debits and credits at the appropriate level, this cheat sheet will be helpful to increase the knowledge with specific details. Such as equity entries, accounting balancing, ledger entries, assets transactions etc.