Debits and Credits MADE EASY with ADEx LER

26 November 2019 Unleash your inner Financial Pro‍‍‍‍
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Finally understand Debits and Credits and remember it easily with our secret weapon: ADEx LER (6:23)
There is a simple rule to understanding debits and credits. By the end of this tutorial you will understand the difference between debits and credits in accounting. You will have your cheat sheet to refer to when it comes to understanding whether a transaction needs to be debited or credited.
You will also understand debit and credit in banking and why banks use the terminology that seems confusing: debit card and credit card. You'll understand how that fits with our debit and credit examples.

Overview:
Debits and Credits are a fundamental part in accounting. Debits and Credits affect accounts differently depending on the type of account. To memorize the rules easily just remember: Accountants Don't Expect Low Earning Rates.

Debits and Credits always go together. Every transaction will have Debits and Credits and at least two accounts will be affected. If one account is debited then another one must be credited. Just think of it like a bank transfer. When you send someone money it comes out of your bank account and goes into their account.

The process of recording transactions with debits and credits is referred to as double-entry accounting, because there are ALWAYS at least two accounts involved. There can be more than 2 accounts involved in one transaction but never less than 2. We call this a flow of economic benefit from a source to a destination.

Assets, Dividends, and Expenses are Debits. The balance of these accounts increases with debits and decrease with credits.

Liabilities, Equity, and Revenues are Credits. The balance of these accounts increases with credits and decrease with debits.

Chapters:
T-Account Basics - 00:53
Rule #1 in Accounting - 1:08
Rule #2 in Accounting - 1:25
Balance of a T-Account - 2:04
Rule #3 in Accounting - 4:10
Which accounts are Debit and which credits - 4:34
ADEX LER (secret accounting method to remember) - 6:23
Accounting Debit / Credit example: 6:41
Debit and Credit in Banking (Debit Card) - 8:00

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