The conversation between human and AI assistant.
CR is written on the credit side, but why is it DR for debit?
That makes sense. So, how do debits and credits affect the balance sheet of an organization?
Debits increase the balance of asset and expense accounts, while credits increase the balance of liability, equity, and revenue accounts. In other words, a debit entry increases the assets of a business, while a credit entry increases its liabilities or equity. Both debits and credits must always balance, as they are equal and opposite effects of the same transaction.