MGT101 Financial Accounting GDB No. 01 Solution Close on May 05, 2014.

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This is to inform that Graded Discussion Board (GDB) No. 01 will be opened on April 25, 2014 for discussion and last date for posting your discussion will be May 05, 2014.

Topic/Area for Discussion

“Rules for Debiting & Crediting”

This Graded Discussion Board will cover first 06 lessons.



For acquiring the relevant knowledge, do not rely only on handouts but also watch the course video lectures and read additional material available online or in any other mode.

Important Instructions:

Your discussion must be based on logical facts.
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For planning your semester activities in an organized manner, you are advised to view schedule of upcoming Assignments, Quizzes and GDBs in the overview tab of the course website on VU-LMS.

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Debits and Credits

Credit and debit are the two fundamental aspects of every financial transaction in the double-entry bookkeeping system.

KEY POINTS

The English words credit and debit come from the Latin words credre and debere, respectively. Credre means "to entrust," and debere means "to owe".
In financial accounting or bookkeeping, "Dr" (Debit) indicates the left side of a ledger account and "Cr" (Credit) indicates the right.
The rule that total debits equal total credits applies when all accounts are totaled.
An increase (+) to an asset account is a debit. An increase (+) to a liability account is a credit.
Conversely, a decrease (-) to an asset account is a credit. A decrease (-) to a liability account is a debit.
It is important for us to consider perspective when attempting to understand the concepts of debits and credits.

credit
an entry in the right hand column of an account; credits increase liability, income, and equity accounts and decrease asset and expense accounts
debit
an entry in the left hand column of an account to record a debt; debits increase asset and expense accounts and decrease liability, income, and equity accounts