How to tell if the transaction accounts are debit or credit

A common way to answer this question is to think about where the money comes from and where does it go. For example, if the company buys equipment by cheque, then it shows the money comes out from the bank and goes in into equipment. Therefore we will have two accounts, one is bank account where the money comes out and therefore it is credit. The other one is equipment account where the money comes in and therefore it is Debit Another way to memorise it will be the DALE CLIP. D standards for Debit as well as Drawings. All assets are Debit. The loss is Debit and Expenses are Debit. C standards for Credit as well as Capital. L stands for liability, all liabilities are Credit. I stands for income and it is Credit. P stands for Profit, profit is Credit.