Debit

Written by Fmi.Online Friday January 6, 2023
A debit is an accounting term for an entry made on the left side of an account. Many times debit is abbreviated as Dr.The double entry accounting system is based on the concept that total debits always equal total credits.

Explanation :

 

A debit does not mean an increase or decrease in an account. Many accounting students make this mistake. A debit is always an entry on the left side of an account. Depending on the account, a debit can increase or decrease the account. Accounts that have debit or left balances include assets, expenses, and some equity accounts. This means that a debit recorded in an asset account would increase the asset account. Conversely, liabilities and revenue accounts have credit or right balances. A debit recorded in a revenue account would decrease the revenue account.

In a nutshell:

  • A debit is an accounting entry that creates a decrease in liabilities or an increase in assets.
  • In double-entry bookkeeping, all debits must be offset with corresponding credits in their T-accounts.
  • On a balance sheet, positive values for assets and expenses are debited, and negative balances are credited.
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