You don't need to be a CA to understand this. Every rupee tells two stories — Lekhya tracks both.
Every transaction affects at least two accounts.
Money always comes from somewhere and goes somewhere else.
Example: You sell goods worth ₹10,000 to a customer
Debit (Money coming in or asset increasing)
Accounts Receivable ₹10,000
Customer now owes you ₹10,000
Credit (Revenue being recognized)
Sales Revenue ₹10,000
You earned ₹10,000 in revenue
Debit = Credit ✓ (₹10,000 = ₹10,000) — the equation is always balanced
Forget the confusing textbook definitions. Here's how to think about it in practice:
| Account Type | Debit does... | Credit does... |
|---|---|---|
| Assets (cash, receivables, equipment) | Increases ↑ | Decreases ↓ |
| Liabilities (loans, payables) | Decreases ↓ | Increases ↑ |
| Capital / Equity (owner's investment) | Decreases ↓ | Increases ↑ |
| Revenue / Income (sales, interest) | Decreases ↓ | Increases ↑ |
| Expenses (rent, salary, purchases) | Increases ↑ | Decreases ↓ |
You pay ₹5,000 rent by bank transfer
Rent expense goes up. Your bank balance goes down.
You buy goods worth ₹20,000 on credit from a supplier
Your stock goes up. You now owe the supplier.
You receive ₹10,000 cash from the customer who owed you
Cash goes up. The customer's debt is cleared.
You don't have to think about debits and credits when creating invoices. Lekhya's journal engine does it automatically:
When you post an invoice
Lekhya debits Accounts Receivable and credits Sales Revenue + GST payable accounts automatically.
When you record a payment received
Lekhya debits Bank and credits Accounts Receivable — the receivable is cleared.
When you record a purchase
Lekhya debits Purchases/Stock and credits Accounts Payable.
Corrections are always via reversal
Lekhya never edits a posted entry. To fix a mistake, it creates a reversing entry and a corrected new one — just like a CA would.
Shows income and expenses over a period (e.g. this financial year). Tells you if you made a profit or loss.
Shows what you own and owe at a point in time. Always balanced: Assets = Liabilities + Capital.
In Lekhya: go to Accounting → Reports → Profit & Loss or Balance Sheet to see these for any date range.