 Very few areas of an introductory accounting class give students trouble, like the rules of debits and credits. Personally I blame the banks and the invention of debit cards. You'll see why shortly. Much of life is about following rules. Don't go on red. Don't steal. Do pay taxes. Always flush and wash your hands. Well, from my experience on college campuses, that last one might be a suggestion. Anyway, accounting is no different. We have rules that tell us how to account for transactions, and those rules are known as the rules of debits and credits. The debit rules are as follows. Assets, withdrawals, and expenses all increase by debits. I remember this with the acronym AW. Debits increase AW. The normal balance of an account is what we would expect to see in a particular account. The normal balance is always what increases the account. So the normal balance for assets, withdrawals, and expenses are debit balances. The credit rules are as follows. Capital, liabilities, and revenues are all increased by credits. I remember this with the acronym CLEAR. Credits increase CLEAR. The normal balance of capital, liabilities, and revenues are credit balances. When we follow the rules of debits and credits, the accounting equation always remains in balance. Please take some time and write down the rules of debits and credits in your notes or on your flashcards, because we will be referencing these rules for much of what we learn in financial accounting. The sooner that you have these memorized, the easier accounting will become. Let's conclude this video with a visual recap of the rules of debits and credits. Assets increase with debits and have normal debit balances. Withdrawals increase with debits and have normal debit balances. Expenses increase with debits and have normal debit balances. Rural increases with credits and have normal credit balances. Liabilities increase with credits and have normal credit balances. Revenues increase with credits and have normal credit balances.