How To Remember Debits and Credits in Accounting (DEAD CLIC)

Double entry is a fundamental theory to master in the world of accountancy and as an accountant, it is important to fully understand the concept.

One of the most common questions asked in the accounting world is “what is the double entry for ______?”

Even if you haven’t fully got to grips with double entry just yet, there is an easy way to remember which way round the debits and credits should be entered for any transaction.

That is to remember the mnemonic DEAD CLIC.

Looking at the diagram above, whenever you are wondering which way round the debits and credits should be posted, conjure up this image in your mind.

Categories of DEAD CLIC in Accounting

Before we move on to discuss how to use DEAD CLIC, we must first understand the different categories and types of transactions that businesses will make in their accounts:

Income	Revenue generated by making sales to customers. Put simply, any money into the business.
Expenses	Operating costs incurred by the business such as raw material costs, rent and salaries.
Assets	An asset is anything owned by a business that has current or future economic value, such as property, equipment or cash in the bank.
Liabilities	Money owed by the business to other entities, such as loans and purchases bought on credit
Capital	Capital is amounts that are owed to the owner of the business from investments in the business or for profits earned by the business.
Drawings	These are amounts withdrawn from the business by the owner.

How To Use DEAD CLIC

Now that we know the DEAD CLIC mnemonic, and what each category represents, how do we use it in a real-life example?

Remember that each category on the mnemonic represents an increase in that category.

So an increase in an asset sits under the Debit heading. An increase in Income sits under the Credit heading.

Conversely, when any of the categories decrease, you would just do the opposite. For example, a liability increase sits under the Credit heading, so a decrease in a liability would be a Debit.

An expense increase sits under the Debit heading, therefore, a decrease in an Expense would be a Credit.

Debit and Credit Examples using DEAD CLIC

Here are some examples of common business transactions and the debits and credits used:

A Cash Sale of £100

Debit	Credit
Cash £100	Sales £100
Increase Asset	Increase Income

A Credit Sale of £1,000

Debit	Credit
Trade Receivables £1,000	Sales £1,000
Increase Asset	Increase Income

A Cash Purchase of £100

Debit	Credit
Purchases £100	Cash £100
Increase Expense	Decrease Asset

A Credit Purchase of £1,000

Debit	Credit
Purchases £1,000	Trade Payables £1,000
Increase Expense	Increase Liabilities

Receiving £200 From a Credit Customer

Debit	Credit
Cash £200	Trade Receivables £200
Increase Asset	Decrease Asset

Paying £500 to a Credit Supplier

Debit	Credit
Trade Payables £500	Cash £500
Decrease Liabilities	Decrease Asset

Taking Out a £10,000 Loan from a Bank

Debit	Credit
Cash £10,000	Bank Loan £10,000
Increase Asset	Increase Liabilities

Paying £100 Interest Off £10,000 Loan from a Bank

Debit	Credit
Bank Loan £100	Cash £100
Decrease Liabilities	Decrease Asset

Write Off £200 of Bad Debt

Debit	Credit
Bad Debt Expense £200	Trade Receivables £200
Increase Expense	Decrease Asset