G.1 Standard Accounting Conventions

Under standard double-entry accounting rules, accounting transactions must contain balanced debits and credits. Additionally, when you post a debit to a debit account, you increase the running balance for that debit account; and when you post a credit to a debit account, you reduce the running balance for that debit account. Conversely, when you post a credit to a credit account, you increase the running balance for that credit account; and when you post a debit to a credit account, you reduce the running balance for that credit account.

Table G-1 Standard Accounting Conventions

Posting A	To A	Effect
Debit	Debit Account	Increases the running balance
Credit	Debit Account	Decreases the running balance
Credit	Credit Account	Increases the running balance
Debit	Debit Account	Decreases the running balance

For example, if you generate an accounting transaction for a new loan, your transaction debits the appropriate asset GL account (a debit account) for the new loan, therefore, increasing the running balance for the Loan GL account; and credit cash (also a debit account), therefore, reducing the running balance for the Cash GL account.

Table G-2 Debit/Credit Entries

Debit	Credit
New loan $500	Cash ($500)