Category : Bookkeeping

For instance, when you sell a product, your cash account increases (i.e., you debit the assets account), and so does your revenue (i.e., you credit the revenue account). But the transaction also decreases your inventory (assets) and increases the cost of goods sold (expense) accounts. So, you must also credit the assets (inventory) and debit the expenses (COGS). Where it is easy to get confused when first learning debits and credits is learning the difference between cash and non-cash entries. […]