why are revenues recorded as credits and expenses as debits?

Answer 1

Revenues are earnings so they are "credited" to your account and expenses are just that, expenses so they are "debited" from your account. The true and simple answer lies in the definition of each word.

Answer 2

In a double-entry bookkeeping system debits go on the left and credits go on the right. Each entry on one side of the ledger requires a corresponding entry on the other side to keep the books in balance. For every debit posted you MUST record a credit in the same amount.

When you record income you debit cash (or accounts receivable) and credit revenue. This increases your assets -- cash or accounts receivable -- and increases revenue.

When you record an expense you credit cash (or accounts payable) and debit the expense account. This decreases an asset account -- cash -- or increases a liability account -- accounts payable -- and correspondingly increases an expense account.

The terms "Debit" and "Credit" as used in bookkeeping literally mean "Left" and "Right," nothing else. As long as the left and right sides of the ledger are in balance, everything is OK.

Answer 3

It is because when using a double accounting system, you need to have two sides to every transaction. When you receive income, you would increase assets through cash or accounts receivable, which would be a debit. To complete that transaction, you need an equal increase to credits, which would be revenue.

Likewise, when you spend money (a credit to decrease assets) or incur a liability (a credit to increase liabilities) you need an offsetting debit, which would be expenses.

Answer 4

Revenue is what you take in, therefore it is credited to your account(added). Expenses are what you pay out, so they are a debit( like a debit card takes out of your account).

Answer 5

so that you can have balance on your statement - try putting it somewhere else and you will way off. It's a trick too old to trace back - but that's just the way it is. Wait a minute - there's something wrong with your question...Are you talking about business or just your checking account? expense should be taken out because when you buy something from the store you take out some of your money, and when you deposited something, it will be credited to you because you put it in.

Answer 6

revenue = money coming in.
expenses = money going out.