AccountancyHow to use this practice
Deciding debit and credit is the one skill that every chapter of accountancy depends on. A wrong side in the journal becomes a wrong ledger, a wrong trial balance and wrong final accounts. The good news is that it is a small skill and yields quickly to drill. Do one round of the quiz a day for a week and the decision becomes automatic.
- Read the transaction and say the two accounts aloud before you look at the choices.
- For each account, say its kind and whether it rose or fell.
- Choose, check, and read the reason even when you are right.
- Note the ones you get wrong. They usually fall into a few families, listed below.
The families that cause most mistakes
- Goods and assets. Goods bought for resale go to Purchases; things bought for use (furniture, computer, machinery) go to their own asset account.
- Credit transactions. When no cash moves, the other account is a person: the supplier or the customer. Cash appears only when money is paid or received.
- Receipt from a debtor. It is not a sale. The sale was recorded earlier; the receipt only reduces the debtor.
- Owner's personal items. Cash or goods taken by the owner, and personal bills paid by the business, are Drawings.
- Goods leaving without a sale. Fire, theft, samples, charity, owner's use: credit Purchases, at cost.
- Year-end adjustments. Outstanding and prepaid expenses and accrued income each create a new account that goes to the balance sheet.
The rules are explained with fifteen analysed transactions on the rules of debit and credit page, and full entries with narrations are on the journal entries page.
All 45 transactions with answers
The complete list, for revision or printing.
| Transaction | Debit | Credit |
|---|---|---|
| Started business with cash ₹2,00,000. | Cash A/c | Capital A/c |
| Opened a bank account by depositing ₹50,000 cash. | Bank A/c | Cash A/c |
| Bought goods for cash ₹15,000. | Purchases A/c | Cash A/c |
| Bought goods on credit from Mehta & Sons ₹30,000. | Purchases A/c | Mehta & Sons |
| Sold goods for cash ₹12,000. | Cash A/c | Sales A/c |
| Sold goods on credit to Priya ₹8,000. | Priya | Sales A/c |
| Received ₹8,000 cash from Priya. | Cash A/c | Priya |
| Paid ₹30,000 by cheque to Mehta & Sons. | Mehta & Sons | Bank A/c |
| Paid shop rent ₹6,000 in cash. | Rent A/c | Cash A/c |
| Paid salaries ₹20,000 by cheque. | Salaries A/c | Bank A/c |
| Bought a computer for office use, paying ₹40,000 by cheque. | Computer A/c | Bank A/c |
| Bought furniture on credit from Modern Furnishers ₹18,000. | Furniture A/c | Modern Furnishers |
| Owner withdrew ₹5,000 cash for personal use. | Drawings A/c | Cash A/c |
| Owner took goods costing ₹2,000 for personal use. | Drawings A/c | Purchases A/c |
| Withdrew ₹10,000 from the bank for office use. | Cash A/c | Bank A/c |
| Returned defective goods worth ₹1,500 to Mehta & Sons. | Mehta & Sons | Purchases Return A/c |
| Priya returned goods worth ₹500. | Sales Return A/c | Priya |
| Received commission ₹3,000 in cash. | Cash A/c | Commission Received A/c |
| Received interest ₹1,200 from the bank, credited to the account. | Bank A/c | Interest Received A/c |
| Bank charged ₹250 as bank charges. | Bank Charges A/c | Bank A/c |
| Took a loan of ₹1,00,000 from the bank; amount credited to the current account. | Bank A/c | Bank Loan A/c |
| Repaid ₹20,000 of the bank loan by transfer. | Bank Loan A/c | Bank A/c |
| Paid interest on loan ₹4,000 by cheque. | Interest on Loan A/c | Bank A/c |
| Rohan, a debtor, became insolvent; ₹3,000 due from him is lost. | Bad Debts A/c | Rohan |
| Received ₹1,000 against a debt written off last year. | Cash A/c | Bad Debts Recovered A/c |
| Depreciation of ₹6,000 charged on machinery. | Depreciation A/c | Machinery A/c |
| Rent for March ₹6,000 is due but not paid. | Rent A/c | Outstanding Rent A/c |
| Insurance premium of ₹2,400 paid this year relates to next year. | Prepaid Insurance A/c | Insurance A/c |
| Commission of ₹1,500 has been earned but not yet received. | Accrued Commission A/c | Commission Received A/c |
| Paid wages ₹4,000 for installing a new machine. | Machinery A/c | Cash A/c |
| Paid carriage ₹800 on goods purchased. | Carriage Inwards A/c | Cash A/c |
| Goods costing ₹5,000 were destroyed by fire. | Loss by Fire A/c | Purchases A/c |
| Goods costing ₹1,000 were given away as free samples. | Advertisement A/c | Purchases A/c |
| Gave ₹2,000 cash as charity. | Charity A/c | Cash A/c |
| Sold an old machine for ₹25,000 cash at its book value. | Cash A/c | Machinery A/c |
| Received a bill of exchange accepted by Priya for ₹8,000. | Bills Receivable A/c | Priya |
| Accepted a bill drawn by Mehta & Sons for ₹30,000. | Mehta & Sons | Bills Payable A/c |
| Allowed interest on capital ₹9,000 to the owner. | Interest on Capital A/c | Capital A/c |
| Charged interest on drawings ₹300. | Capital A/c | Interest on Drawings A/c |
| Paid electricity bill ₹1,800 by cheque. | Electricity A/c | Bank A/c |
| Owner brought in additional capital of ₹50,000 by cheque. | Bank A/c | Capital A/c |
| Paid income tax of the owner ₹7,000 from the business bank account. | Drawings A/c | Bank A/c |
| Purchased stationery for office use ₹600 in cash. | Stationery A/c | Cash A/c |
| Received a cheque of ₹5,000 from Dev and deposited it the same day. | Bank A/c | Dev |
| Dev's cheque of ₹5,000 was dishonoured by the bank. | Dev | Bank A/c |
Questions students ask
How do I decide which account to debit?
Name the two accounts in the transaction, decide the kind of each (asset, expense, liability, capital or revenue) and whether it has increased or decreased. Assets and expenses increase by debit; liabilities, capital and revenue increase by credit.
Why is Purchases credited when goods are lost or given away?
Because those goods will no longer be sold. Crediting Purchases at cost removes them from the cost of goods available for sale.
Is my score saved?
No. The score is kept only while this page is open. Nothing is stored or sent.
For study, and independent. These pages explain accountancy as it is generally taught in Class 11, Class 12 and B.Com courses in India, in our own words with our own examples, reviewed in November 2026. This site is not connected with NCERT, CBSE, ICAI or any board or university. Syllabuses change: follow your own board's or university's current syllabus and textbook. Nothing here is professional accounting, tax or legal advice.