{"id":283430,"date":"2024-10-02T16:28:11","date_gmt":"2024-10-02T04:28:11","guid":{"rendered":"https:\/\/www.reckon.com\/au\/?page_id=283430"},"modified":"2026-08-06T14:04:50","modified_gmt":"2026-08-06T02:04:50","slug":"debit","status":"publish","type":"glo","link":"https:\/\/www.reckon.com\/au\/glossary\/debit\/","title":{"rendered":"What is debit?"},"content":{"rendered":"

[et_pb_section fb_built=”1″ custom_padding_last_edited=”off|desktop” _builder_version=”4.27.2″ custom_margin=”0px||0px||false|false” custom_padding=”0px||0px||false|false” custom_padding_phone=”0px||||false|false” da_disable_devices=”off|off|off” locked=”off” global_colors_info=”{}” da_is_popup=”off” da_exit_intent=”off” da_has_close=”on” da_alt_close=”off” da_dark_close=”off” da_not_modal=”on” da_is_singular=”off” da_with_loader=”off” da_has_shadow=”on”][et_pb_row column_structure=”1_3,2_3″ _builder_version=”4.27.2″ background_size=”initial” background_position=”top_left” background_repeat=”repeat” width=”100%” custom_margin=”0px||0px||false|false” custom_padding=”0px||0px||false|false” global_colors_info=”{}”][et_pb_column type=”1_3″ module_class=”table-contents” _builder_version=”4.23″ background_color=”#f3f2f6″ custom_padding=”25px||25px||true|false” sticky_position=”top” sticky_limit_bottom=”section” sticky_position_tablet=”top” sticky_position_phone=”none” sticky_position_last_edited=”on|desktop” border_radii=”on|24px|24px|24px|24px” global_colors_info=”{}” custom_padding__hover=”|||”][et_pb_text _builder_version=”4.23″ text_font=”||||||||” global_colors_info=”{}” background__hover_enabled=”on|desktop”][\/et_pb_text][\/et_pb_column][et_pb_column type=”2_3″ _builder_version=”4.16″ custom_padding=”|||” global_colors_info=”{}” custom_padding__hover=”|||”][et_pb_text admin_label=”Definition description ” _builder_version=”4.27.7″ header_2_font_size=”32px” header_2_font_size_tablet=”30px” header_2_font_size_phone=”26px” header_2_font_size_last_edited=”on|tablet” global_colors_info=”{}”]<\/p>\n

A debit is an accounting entry that raises assets or expenses, or lowers liabilities, equity or revenue. Recorded on the left side of a ledger account and abbreviated as \u2018Dr\u2019, debits and credits are the basis of double-entry bookkeeping and financial accounting.<\/p>\n

What does a debit mean in accounting?<\/h2>\n

A debit is an accounting entry that results in either an increase in assets or a decrease in liabilities on a company\u2019s balance sheet<\/a>. It\u2019s one half of every transaction in double-entry accounting.<\/p>\n

A debit raises the value of an asset account or expense account. It lowers the value of a liability account, equity account or revenue account.<\/p>\n

What\u2019s the difference between debits and credits?<\/h2>\n

Debits and credits are used in double-entry bookkeeping to capture changes in value from business transactions. A debit is recorded on the left side of the ledger or T-account, and a credit appears on the right side.<\/p>\n

A credit does the opposite \u2013 it increases liabilities, equity and revenue while decreasing assets and expenses.<\/p>\n

Here\u2019s how a debit or credit entry plays a part for each account\u2019s normal balances:<\/p>\n\n\n\n\n\n\n\n\n
Account type<\/th>\nDebit<\/th>\nCredit<\/th>\n<\/tr>\n
Asset account<\/td>\nIncrease<\/td>\nDecrease<\/td>\n<\/tr>\n
Expense account<\/td>\nIncrease<\/td>\nDecrease<\/td>\n<\/tr>\n
Liability account<\/td>\nDecrease<\/td>\nIncrease<\/td>\n<\/tr>\n
Equity account<\/td>\nDecrease<\/td>\nIncrease<\/td>\n<\/tr>\n
Revenue account<\/td>\nDecrease<\/td>\nIncrease<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

Assets and expenses have natural debit balances. Liabilities, equity and revenue accounts have natural credit balances. A debit increases an expense account in the income statement, while a credit decreases it.<\/p>\n

How do debits relate to the accounting equation?<\/h2>\n

The accounting equation states that assets equal liabilities plus equity. Debits and credits are used to keep this balance across every transaction. Debits sit on the left-hand side of each account.<\/p>\n

Expanded, the equation is:<\/p>\n

Assets = Liabilities + Owner\u2019s equity + (Revenue \u2013 Expenses).<\/strong><\/em><\/p>\n

The total dollar amount of all debits must equal the total dollar amount of all credits.<\/p>\n

How do you record a debit in a journal entry?<\/h2>\n

Every transaction has an effect on at least two accounts \u2013 one account is debited, and another is credited. These two accounts can be different accounts of any type. In a standard journal entry, all debits are placed on the top lines, with credits listed underneath.<\/p>\n

As an example, let\u2019s say a business buys $10,000 of inventory on credit. Inventory (an asset account) gets a debit entry of $10,000. Accounts payable (a liability account, showing what the business owes) gets a corresponding credit of $10,000 until payment is made.<\/p>\n\n\n\n\n\n
Date<\/th>\nAccount<\/th>\nDebit<\/th>\nCredit<\/th>\n<\/tr>\n
01\/12\/2026<\/td>\nInventory<\/td>\n$10,000<\/td>\n\u00a0<\/td>\n<\/tr>\n
\u00a0<\/td>\nAccounts Payable<\/td>\n\u00a0<\/td>\n$10,000<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

The debit side and credit side have to balance. When journal entries are accurately recorded, you can extract a trial balance, balance sheet, financial statement<\/a>, and cash flow statement.<\/p>\n

What are the main types of debit accounts?<\/h2>\n

These are the main types of accounts that relate to debit:<\/p>\n