RB User Guide > Appendices > Accounting Basics > Debits and credits

Double-entry examples

In the following examples, we used $500.00 as the transaction amount.

Invoice (sale)

When an invoice is generated, Accounts Receivable and Revenue increase.

Payment (cash receipt)

When a payment is received, Cash (asset) increases and Accounts Receivable (asset) decreases.

Credit Memo (discount)

When a credit memo is issued as a discount, Accounts Receivable (asset) decreases, and Discount (expense) increases.

Debit Memo (returned check)

If a debit memo is issued for a returned check, Cash (asset) decreases and Accounts Receivable (asset) increases, in a reversal of the original transaction (example #2).

Void

If an invoice is voided, Accounts Receivable (asset) and Revenue (income) decrease, as a reversal of the original sale (example #1).

Write-off

If an invoice is written off, Accounts Receivable (asset) decreases and Bad Debt (expense) increases.

Duplicate Payment

When a duplicate payment is received, Cash (asset) and Refund (liability) increase.

Refund

When a refund check is issued, Cash (asset) and Refund (liability) decrease.

Reference

• Five basic accounts
• The accounting equation
• Debits and credits