The sale of goods by a business on credit. 1. Debtors are assets for the business, therefore debit the increase in assets. 2. Sales are income earned by the business, therefore cr… See more

When a business purchases goods from a supplier on credit. 1. Purchase is a direct … See more

Drawings are personal withdrawals made by the owner and act as a reduction in the owner’s capital. 1. Drawings are a reduction in capital for the business therefore debit the decrea… See more

When a business purchases an asset for cash. 1. A new purchase increases overall assets for the firm, therefore, debit the increase in assets. 2. When a business makes a pa… See more