Last Updated: November 21, 2025
Accounting Equation
Basic Equation
Assets = Liabilities + Equity
Debits and Credits
| Account Type | Increase | Decrease |
|---|---|---|
Assets
|
Debit | Credit |
Liabilities
|
Credit | Debit |
Equity
|
Credit | Debit |
Revenue
|
Credit | Debit |
Expenses
|
Debit | Credit |
Financial Statements
| Statement | Shows |
|---|---|
Balance Sheet
|
Assets, liabilities, equity at a point in time |
Income Statement
|
Revenue and expenses over a period |
Cash Flow Statement
|
Cash inflows and outflows |
💡 Pro Tip:
Remember DEAD CLIC: Debits increase Expenses/Assets/Dividends, Credits increase Liabilities/Income/Capital!