Read debit and credit as account sides
Use the double-entry rule to record both effects of a transaction without treating debit and credit as good or bad.
Cambridge IGCSE Accounting 0452 / (9–1) 0985, 2027–2029 Version 1. These lessons follow the 2027–2029 syllabus only; the separate 2026 syllabus update is not yet mapped. Written practice is self-checked, not an official Cambridge grade. Full timed-paper practice and human subject-teacher review remain pending.
Before you begin
- No previous accounting study is assumed. Keep the business, transaction and accounting period in view, and distinguish a resource, a claim and a performance result.
Work on paper. Try each question before revealing help, and explain why your method works.
Quick readiness check
What must be true of a complete double-entry transaction?
What you will learn
- Explain debit and credit as the left and right sides of an account
- Apply the usual increase rules for assets, expenses, income, liabilities and equity
- Record a transaction with equal debits and credits
Start with the account type
Every transaction is recorded in at least two accounts: one or more debit entries and one or more credit entries, with total debits equal to total credits.
Assets, expenses and drawings normally increase on the debit side. Liabilities, owner's equity and income normally increase on the credit side. Debit and credit name account sides; neither means good, bad, money in or money out by itself.
Explain why the entry balances
A business buys equipment for cash. Equipment, an asset, increases with a debit; bank, also an asset, decreases with a credit. Both effects belong to the same transaction, so the total debit equals the total credit.
Choose the accounts from the transaction first, then decide which side increases or decreases. Do not choose a debit or credit from the words ‘receive’ or ‘pay’ alone.
Pause and explain
A business pays $460 rent by bank transfer. Which entry is correct?
Worked example
A shop buys equipment for $1,200 cash. Name the accounts and the entries.
Show the worked solution
- Equipment is an asset and increases: debit Equipment $1,200.
- Bank is an asset and decreases: credit Bank $1,200.
- Check total debits $1,200 = total credits $1,200.
Answer Debit Equipment $1,200; credit Bank $1,200. The business exchanges cash for equipment, so total assets are unchanged.
Try a topic test
Choose Easy, Normal or Difficult. Save your answers and open worked review after finishing.
Test this topic →From guided practice to a new situation
Write your answer and reasoning first. Use a hint only if you are stuck. The model solution is for self-checking; your written work is not automatically marked.
A business buys inventory for $350 cash. State the two accounts and entries.
Give me a hint
Identify the inventory cost and the cash asset movement.
Compare my reasoning
- Purchases is an expense account for inventory bought for resale in this example.
- The expense increases: debit Purchases $350.
- Cash decreases: credit Cash $350; totals are equal.
Debit Purchases $350; credit Cash $350.
Look for these in your work
- Accounts named
- Sides correct
- Equal totals checked
A retailer sells goods for $780 cash. For this introductory transaction, record the income and cash effects.
Give me a hint
Cash is an asset; sales is income. Apply the increase rule to each account.
Compare my reasoning
- Cash increases by $780, so debit Cash.
- Sales income increases by $780, so credit Sales.
- Debit and credit totals each equal $780.
Debit Cash $780; credit Sales $780.
Look for these in your work
- Cash increase recorded
- Income increase recorded
- Entry balances
A business pays $250 of a $900 amount owed to a supplier. Show the two entries and explain why the full supplier amount is not cleared.
Give me a hint
Reduce the liability by the amount paid and reduce the bank asset by the same amount.
Compare my reasoning
- Debit the supplier account $250 to reduce the liability.
- Credit Bank $250 to record the bank asset decrease.
- The remaining liability is $900 − $250 = $650.
Debit the supplier account $250; credit Bank $250. A $650 liability remains, because only $250 of the $900 balance was paid.
Look for these in your work
- Liability reduced
- Bank reduced
- Remaining balance calculated
Common mistakes
- Calling debit an increase for every account type
- Treating credit as cash received
- Recording only one side of a transaction
What can you explain now?
A business pays a supplier from its bank account. Which side records the reduction in bank?
Compare with the explanation
Credit Bank
Bank is an asset; a decrease in an asset is recorded on the credit side.
After trying it yourself, choose your next review. This is your self-assessment.
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Make it stick
Why can a credit entry record a decrease in an asset?
If you needed the solution, close it and solve the problem again from a blank page. A correct answer is stronger when you can explain the reason for each step.