(_a_) The receipt of merchandise or money. (_b_) The rendering of services. (_c_) The use of something of value. _Examples_-- (_a_) John Doe pays us $10.00 on account. We _credit_ his account with the amount. (_b_) Our attorney makes a charge for legal services. We _credit_ his account with the amount. (_c_) We rent or lease property to another; and when payment is made, we _credit_ his account. =4. Rules for Debit and Credit.= Debit and credit are the fundamental principles of bookkeeping. The general rules to be followed in debits and credits are: Debit cash when you receive it. Debit a person when you trust him. Debit a person when you pay him. Credit cash when you pay it out. Credit a person when he trusts you. Credit a person when he pays you. =5. Balance.= When the two sides of an account differ in amount, it is said to show a balance. If the debit side of the account is the larger, the difference is a _debit balance_. If the credit side of the account is the larger, the difference is a _credit balance_. _Example_--If we debit John Doe's account for two tons of coal at $7.50 a ton, or $15.00 (see Example (_a_), Article 2), and credit his account with $10.00 paid (see Example (_a_), Article 3), the debit side of the account is $5.00 greater than the credit side. Therefore it shows a debit balance. METHODS OF BOOKKEEPING 6. There are but two methods or systems of bookkeeping, and they are known as _single entry_ and _double entry_. No matter in what form bookkeeping records are kept, the method must be either single or double entry. Single entry is used only in very small businesses or by those who do not understand the advantages of double entry. SINGLE ENTRY 7. As the name indicates, single entry is a single record of the transaction--that is, a record of one phase of the transaction only. _Example_--John Doe's account would show that he received two tons of coal, but there would be no corresponding account to show that our supply of coal had been diminished. Single entry fails to fulfil the object of bookkeeping, as it does not exhibit the true financial condition of the business, and is incapable of proof of accuracy. DOUBLE ENTRY 8. Double entry is a system of making two entries (or a double record) of every transaction. In every business transaction, two distinct factors are involved--namely, that which is received, and that which is parted with. If we sell a given quantity of a commodity, we part with it, and the sale takes from or decreases the value of that particular commodity in our possession. If we sell for cash, the transaction adds to our cash possessions; while if the value of the commodity is debited or charged to the account of a customer, it adds to the amount we are to receive from that customer. =9. Principle of Double Entry.= Double entry is a system of debits and credits. One writer expresses it as a system of opposing contra things.