On the left side of the loan equation for expense subjects, borrowing increases and lending decreases. On the right side of the equation, borrowing increases and debiting decreases. The following is a specific explanation of each category. Note that when memorizing, you should not only consider the general situation, but also the general situation. Also consider special.

1. Assets generally include increases in borrowings and decreases in loans, except for allowance accounts (such as accumulated depreciation, accumulated amortization, bad debt provisions, inventory depreciation provisions, and other XXXX provisions are all allowance accounts). Balances are generally on the debit side, except for allowances, which are on the credit side.

There are two special balances to keep in mind, accounts receivable and prepaid accounts. The balance can be borrowed or loaned. On the debit side, it is an asset. If it is a loan, it changes from an asset to a liability.

2. When borrowing increases or decreases in costs, there is usually a balance on the debit side, but manufacturing expenses may not have a balance.

3. If there is an increase in expenses or a decrease in loans, if there is no balance at the end of the period, it will be transferred to the current year's profit and participate in the calculation of profit. (Belongs to the category of profit and loss)

4. Liabilities are increased or debited, and the balance is generally on the credit side. Two special things should be kept in mind: accounts payable and accounts received in advance. The balance direction can be borrowed or loaned. The nature of the credit is a liability, and if it is on the debit side, the liability sheet is an asset.

5. Owner's equity loans increase, debit or decrease, and the balance is generally on the credit side. Two special things should be remembered: this year's profit and profit distribution - in order to distribute profits, the balance can be borrowed or loaned. A credit indicates profit (profit greater than zero), and a debit indicates loss (profit less than zero). The current year's profits are transferred to profit distribution at the end of the year - there is no balance in undistributed profits.

6. If there is an increase or decrease in income-related loans and there is no balance at the end of the period, it will be transferred to the current year's profit and participate in the calculation of profit. (Belongs to the profit and loss category).

7. There is no balance in the profit and loss category, and it will be transferred to the current year's profit at the end of the period.

Calculation method for debit and credit of expense accounts:

1. The reason why you cannot remember the debit and credit of expense accounts is because the classification of accounting accounts is inaccurate.

2. Assets = Responsibility + Owner’s Equity, and Profit = Income – Expenses. Profit is the result of business operation and should belong to the owner.

3. Assets (cost) + expenses = responsibility + owner’s equity + income. The left side of the equation is the increase in borrowing and the decrease in credit, and the right side is the increase in borrowing and decrease in borrowing.