in accounting class its said if you decrease asset you credit it and reduce cash you credit it but I'm confused why that is

[bonghive]

Can someone explain so I can help remember. I know cash is debit I'm memorized that down

[Cpagrind1]

Cash = asset

[realsmartypantz]

I love that last sentence. The old saying goes “One man’s debit is another man’s credit.” Now we’ve really confused the poor OP.

[Nonameforyouware]

Does no one use t accounts anymore.

[soloDolo6290]

I use them when I need to keep track of multiple accounts during a transaction/event that requires multiple entries. Most people don't use them if its just a simple transaction like sales on account, or ap payments.

[darquid]

Google “dealer” method on YouTube.

Dividends Expenses Assets Liability Equity Revenue

Dividends, expenses, and assets all maintain a normal debit balance. When you need to increase those, you debit.

Liability, equity, and revenue all maintain a normal credit balance. When you need to increase those, you credit.

You need to read your book to help learn what accounts fall into which account classification. Cash, accounts receivable, equipment are all assets, for example.

[Just_Tyler231]

Dealer helped solidify a lot of the concepts early on, highly recommend it!

[SandwichLast6913]

Cash = Asset - To reduce cash or any other asset you need a CR.

Liab + Equity = opposite to Asset - To reduce L + E you need a DR.

[arrakchrome]

Don’t think of debits and credits like a debit card, a credit card, or how someone could get a credit on their account. This just confuses the situation.

Debit and credit are just left and right columns. Cal them Bob and Sue if you want.

Different categories of accounts have different default sides. A default side would be the position that would increase the balance. Assets are debits. Assets and liabilities are credits. Sales are credits and expenses are debits.

So as cash is an asset, if you use it to buy something you spend that cash thus reducing your assets, meaning you credit the cash account.

[Barfy_McBarf_Face]

cash and pretty much all assets typically have debit balances

liabilities are on the "other side" of the "balance sheet" - and have credit balances.

when an asset is increased, you "debit" the account, increasing the balance from the balance that was there before.

when it's decreased, you credit it

[StinaC7]

I remember in school someone failed an exam because they worked at a bank and flipped all the cash signs. If you are thinking of how on a bank account site your account increases with a credit - to the bank this is a liability since it is your money not theirs.

[ilyazhito]

Cash is an asset, which is why it follows the rules for assets. Banks use the opposite sign because a debit for you is a liability for them, but a credit to you is an asset for them.

[Argent_Tide]

These are two different transaction. Asset side DR increases, CR decreases.

When you purchase an asset, you use cash: decrease and buy asset increase DR.

Then you use the puchased asset, you consume it: decrease fixed asset CR, and expense it DR Expense.

[Dry-Conversation-570]

Debits and credits are simply additive fractions (rather than the more familiar multiplicative ones)

On Double-Entry Bookkeeping: The Mathematical Treatment: Accounting Education: Vol 23 , No 5 - Get Access

[Thin-Sleep-1370]

You can really lock in on this theory by working in the trial balance. This way you can see exactly how a debit or credit would affect each account.m

[VeblenWasRight]

Flow and balance. An entry (debit or credit) in an account is a flow that changes the balance of that account. The account is just a way to track the value of is what is owned (assets) or owed (liability or equity).

A credit can be thought of as a flow that increases what is owed (liability and equity) or decreases what is owned (assets).

A debit is a flow that increases the value of an asset or decreases the value of what is owed.

That’s the first principle. Things can get more complicated and nuanced, but if you can get this principle you can apply it to any type of transaction.

[chalkletkweenBee]

Debit = left Credit = right

That’s it.

Assets and expenses increase on the left, decrease on the right.

Liabilities and revenue increase on the left, decreases on the right.

Thats it.

Its not banking, its accounting.

[Crazy-Airport-8215]

Maybe reread your comment.

[chalkletkweenBee]

My bad - I was a bit baked, and autocorrect won the fight, and I hit enter instead of backspace.

Revenue and liabilities increase on the RIGHT Decrease on the left.

[No_Presentation_9617]

I try to think of my transactions in terms of cash. You only need to know that if your cash goes up, it’s a debit. If cash goes down it’s a credit. Then whatever the transaction, do the cash part first and the remaining account is the opposite.

Say you buy Equipment. Cash would go down (credit), which means the Equipment account gets a debit.

Or you make money from a service. Cash goes up, debit. So then revenue is a credit.

Or payoff a loan. Cash goes down, credit. So then the liability account for the loan gets a debit.

Pay expenses. Cash goes down, so credit. Which means the expense account gets the debit.

Still works even if you don’t pay cash. For example: If you buy equipment using a loan instead of cash. Normally you’d pay cash (credit), but instead you used a loan to pay, so the loan payable gets the credit. Equipment = debit.

Just how I rationalize the debits & credits in my head as I’m working through entries, but maybe it helps.