The effect of Drs & Crs and the significance of each entry is summarised
below:
|
Debits (Drs)
|
Credits (Crs)
|
| Balance Sheet - debits increase an asset's value - debits reduce a liability (or amount owed) |
Balance Sheet - credits reduce an asset's value - credits increase a liability (or amount owed) |
| Income Statement (Profit & Loss) - debits reduce profit (net income) - debits increase expenses |
Income Statement (Profit & Loss) - credits increase profit (net income) - credits decrease expenses |