05-02-2005, 01:57 PM
Debit and Credit do not imply favorable or unfavorable. Every transaction has both a debit and credit side so if debit or credit were to imply favorable and unfavorable then every transaction would be both favorable and unfavorable. Further, an item that reduces your cash account could be favorable for a business. An example would be advertising expense that will cost you now but benefit you later by increased sales.
A different example where cash would be debited capital contributions would be a credit and a debit to the balance sheet. You would debit cash and credit equity. The question as to whether this benefits the business or not would then depend on whether the business is being overcapitalized or not.
A different example where cash would be debited capital contributions would be a credit and a debit to the balance sheet. You would debit cash and credit equity. The question as to whether this benefits the business or not would then depend on whether the business is being overcapitalized or not.
