You begin by placing Alcie's name down a column as below:

A
L
C
I
E

Next, you enter the account types that the letters represent as below;

Assets
Liabilities
Capital - (Owners Equity)
Income - (Revenue)
Expense

Next you add the normal balances for each of the account types

Asset	Debit
Liability	Credit
Capital	Credit
Income	Credit
Expense	Debit

As you can see, the top and bottom are debits and the center three are credits.

 

The next step is to add the type of entry that increases the balance in each of the types of accounts as indicated below:

Asset	Debit	Debit
Liability	Credit	Credit
Capital	Credit	Credit
Income	Credit	Credit
Expense	Debit	Debit

To increase the balance in an account requires the same type of entry as the normal balance.

Next you add the type of entry that is required to decrease the balance in an account type as illustrated below:

Asset	Debit	Debit	Credit
Liability	Credit	Credit	Debit
Capital	Credit	Credit	Debit
Income	Credit	Credit	Debit
Expense	Debit	Debit	Credit

Obviously, to decrease an account balance would require the opposite of the type of entry required to increase a balance.

You are just about complete. The only thing that is missing that you need is Withdrawals. They can easily be added as a sentence below the table as indicated below.

Asset	Debit	Debit	Credit
Liability	Credit	Credit	Debit
Capital	Credit	Credit	Debit
Income	Credit	Credit	Debit
Expense	Debit	Debit	Credit

This completes the rules of Debits and Credits except for withdrawals (proprietorships) and dividends (corporations). Both withdrawals and dividends represent a reduction in the capital of the business. Accordingly, both are debits.

That completes the illustration of ALCIE. Memorize this and your job of recording journal entries should be much easier.

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