Is it right that I debit the refund to [Sales returns] and credit it to [Cash at bank]? But the answer given by my teacher is that the refund is debited to [Trade receivables] and credited to [Cash at bank].
Debit is seen as Dr in accounting. Credit is Cr. They stand for Debit Record and Credit Record.
Credit to the customer.
A debit is money paid out or a loss, a credit in income or a gain.
When goods refund:[Debit] Sales returns[Credit] accounts receivable / cashAdjusting entry:[Debit] sales revenue[Credit] Sales returns
Debit
Is it right that I debit the refund to [Sales returns] and credit it to [Cash at bank]? But the answer given by my teacher is that the refund is debited to [Trade receivables] and credited to [Cash at bank].
Debit is seen as Dr in accounting. Credit is Cr. They stand for Debit Record and Credit Record.
Credit to the customer.
credit
The accounting rules are called the 'golden rules of accounting' ie debit what comes in and credit wht goes out debit the receiver and credit the giver debit all expenses and loss and credit all incomes and gains.
A debit is money paid out or a loss, a credit in income or a gain.
When goods refund:[Debit] Sales returns[Credit] accounts receivable / cashAdjusting entry:[Debit] sales revenue[Credit] Sales returns
Cash is "not" a credit in accounting. The cash account is an asset and is a debit balance account. To increase the cash account you debit the account and to decrease it you credit it.Cash = Current Asset = Debit Balance(GAAP)
In accounting Dr stands for Debit Cr stands for credit the terms literally mean Debit (left side of the accounting equation) Credit (right side of the accounting equation)
Accounting equation: Owner's Equity=Total Equity + Revenue - Expense - Equity of creditors Rules of Debit and Credit: Personal account: Debit the receiver. Credit the giver. Real account: Debit what comes in. Credit what goes out. Nominal account: Debit all expenses and loses. Credit all income and gains.
Luca Pacoli - Father of Modern Accounting