Debits and Credits

Concept

The Rules of Debits and Credits

Debits increase asset and expense accounts, and decrease liability, equity, and revenue accounts. Credits do the opposite. Every journal entry must have equal total debits and credits.

Example

T-Account Visualization

Think of each account as a T-shape. The left side is always the debit side, the right side is always the credit side. For asset accounts, increases go on the left (debit). For liability and equity accounts, increases go on the right (credit).

Key Point

Remember: DEALER - Debits increase Expenses, Assets, and Losses. Credits increase Equity, Assets (contra), Liabilities, and Revenue.

The Accounting Equation

Journal Entries

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Practice questions from this module to reinforce what you learned.

Practice Questions