Page 50 - F3 -FA Integrated Workbook STUDENT 2018-19

Chapter 3

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 relevant ledger
account.

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