Accounting 101 Part 06 Debits Credits

Sixth in series of 17 videos describing the essential ideas typically covered in early weeks of a university-level accounting principles course. This explains what debits & credits are and how they work.

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[enlight09]

good point!

stealing is a source of cash of course. but stealing is a job with costs that far exceed benefits for most of us. getting a job was mentioned; so stealing is technically encompassed by the video content.

not many of us are angels or saints; but most of us are not dumb.

i bet the average accounting grad earns about $2,000,000 in his or her career, while the average armed bank robbery nets about $2,500.

the surest way to screw up being a millionaire is to cheat or steal!

[chandragini]

Hi

Found this tutorials very useful

Just confused with last bit of this video about E & ADE = Expenses and E & LER = Equity

[enlight09]

@chandragini Exactly Right!

[enlight09]

Respond to this video... Well, it is a tad confusing that E appears twice in ADE & LER. Your explanation shows them correctly!

[trifio5242]

I have a question, I wonder if you could help me:

assets is what i have, liabilities is what i owe, therefore equity is my actual REAL worth, so that i can put my hand on it and say THATS MINE! so debits is when my assets increase ONLY. therefore i am richer. credits is when my liabilities increase ONLY, thus i become poorer, BUT HOW IF MY EQUITY INCREASES (I.E. I BECOME RICHER) WE CALL IT A CREDIT?

I am sure I am like 1000000th student asking that, but I honestly don't understand,help...

[enlight09]

@trifio5242

yeah -- we all struggle with that in early days. for weeks, i thought debits were "good" and credits were "bad." i think i got that because i liked debiting cash!

when assets die, we credit the assets and DEBIT expenses! we are poorer, for sure, when that happens.

point is, you will need to take this debit/credit thing on faith for a week or two.

once it clicks, you will never think twice about it again -- it is just the way the equations work.

good luck!

[adelle0001]

thank you so much!

[cynthia2cyga]

Thanks for the tutorial. You've cleared my confusion. Took this subject last year and passed but still not really got it. And btw i'm from Indonesia. Your tutorial gives worldwide effects :)

[SlyBlackNinja]

He didnt mention stealing in getting cash!

[prospectnyc]

To clarify, ADE's are increased with debits and LER's are increased with credits? Thanks!

[luisespa89]

I wish you were my Professor!! Thank you very much!!!

[thebackpackperson]

@trifio5242 Don't think of debits and credits as having to do with being richer and poorer. You're on the right track, and you're right about assets and liabilities as far as where they go. Equity follows the same rule as liabilities. If it goes up, it's a credit. If it goes down, it's a debit. Like i said, don't relate debits and credits to being richer and poorer, just memorize the rules, and roll with it. =)