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Ledger accounting and double-entry bookkeeping

Whether an entry is to the debit or credit side of an account depends on the type of
account and the transaction:

Debit Credit
Increases in: Increases in:

Purchases Revenues

Expenses Liabilities
Assets Shareholders equity

You can use the mnemonic 'PEARLS' to help you to remember this vitally important
double-entry rule.

It is important to note that the opposite entry is used to record decreases. For
example, a reduction in an asset would require a credit entry in the ledger.

Tutor notes guidance – discussion points

Use TYU 2 in chapter 4 and ask students which accounts should be debited and

credited to give a thorough understanding of debits and credits before we move
onto balancing the ledgers.

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