What Is a Debit in Accounting?
Definition, the debit rules, and worked examples, explained in plain English.
Home › Accounting Glossary › Debit
| Also written as | Dr |
|---|---|
| Side of the account | Left |
| Opposite of | Credit |
| Level | Beginner |
| Topic | Financial accounting · Bookkeeping |
Debit in plain English
In everyday life “debit” sounds like money going out. In accounting it does not mean that. A debit is simply the left side of an account, and what it does depends on the type of account. Every transaction is recorded twice, once as a debit and once as a credit, and the two always match. That is the whole idea behind the double entry system.
The debit rules
| Account type | A debit… | A credit… |
|---|---|---|
| Assets (cash, equipment) | Increases | Decreases |
| Expenses (rent, wages) | Increases | Decreases |
| Liabilities (loans, payables) | Decreases | Increases |
| Equity / capital | Decreases | Increases |
| Revenue (sales, fees) | Decreases | Increases |
Worked example
A business buys office equipment for 2,000 and pays in cash. Equipment (an asset) goes up, so it is debited. Cash (also an asset) goes down, so it is credited.
| Account | Debit | Credit |
|---|---|---|
| Equipment | 2,000 | |
| Cash | 2,000 | |
| Total | 2,000 | 2,000 |
Second example: paying 500 rent in cash. Debit Rent expense 500 (expense up) and credit Cash 500 (asset down). Total debits still equal total credits.
- Thinking a debit always means a decrease. For assets and expenses it is an increase.
- Mixing up your bank’s view with your books. When your bank “debits” your account, your balance falls because, to the bank, your balance is something it owes you (a liability). In your own books, cash is an asset, so a bank withdrawal is a credit to Cash.
Remember DEALER: Dividends (or Drawings), Expenses and Assets are increased by debits. LER (Liabilities, Equity, Revenue) are increased by credits.
Quick check
1. Which side of an account is the debit side?
The left side.
2. You pay a supplier 300 in cash for stationery. Which account is debited?
Stationery expense is debited (expense increases) and Cash is credited (asset decreases).
3. Does a debit to a liability account increase or decrease it?
It decreases the liability. For example, repaying a loan debits Loan Payable.
Frequently asked questions
Is a debit an increase or a decrease?
It depends on the account. A debit increases assets and expenses, and decreases liabilities, equity and revenue.
Does debit mean money leaving the business?
No. Debit only means the left side of an account. Buying equipment with cash debits Equipment, which increases an asset.
What is the difference between debit and credit?
They are opposite sides of an account. Debits go on the left and credits on the right, and every transaction needs equal total debits and credits.
Why do debits always equal credits?
Because every transaction has two equal effects. This is the principle of double entry, and it is what lets you prove the books balance with a trial balance.
Keep learning
This page is for general learning. Accounting rules vary by country and standard.