Debits and credits explained
Objective: Decide whether a debit or credit increases or decreases a given account.
Recommended first: Normal balances
A debit is an entry on the left side of an account; a credit is an entry on the right. Whether a debit increases or decreases an account depends only on the account's normal balance.
| Account type | Debit | Credit |
|---|---|---|
| Asset | Increase | Decrease |
| Expense | Increase | Decrease |
| Owner Drawings | Increase | Decrease |
| Liability | Decrease | Increase |
| Equity (Capital) | Decrease | Increase |
| Revenue | Decrease | Increase |
Many beginners struggle because everyday language uses 'credit' to mean money added to a bank account. That is the bank's view: your deposit is money the bank owes you, a liability on its books, so it credits your account. In your own business books, cash in the bank is an asset and increases with a debit. Once you anchor on normal balances, the rule becomes mechanical.
Work through the effect table until you can answer without looking: assets, expenses, and drawings increase with debits; liabilities, capital, and revenue increase with credits.
Check your work
- What is the account's normal balance?
- Is this posting on that side (increase) or the other side (decrease)?
- Did you avoid the 'debit means good' trap?
Paying $400 owed to a supplier decreases a liability (debit Accounts Payable) and decreases an asset (credit Cash).
| Account | Debit | Credit |
|---|---|---|
| Accounts Payable | $400.00 | |
| Cash | $400.00 |
Common mistakes
✗ Memorizing 'debit = increase'.
✓ That is only true for assets, expenses, and drawings.
Guided practice
Use hints freely here.
Item 1 of 2
Debit to Cash
A debit is posted to Cash. Does the debit increase or decrease this account's balance?
Independent practice
Try these without hints. Completing the lesson needs at least one independent item solved without revealing the answer.
Item 1 of 5
Debit to Accounts Payable
A debit is posted to Accounts Payable. Does the debit increase or decrease this account's balance?
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Key terms
- Debit
- An entry on the left side of an account.
- Credit
- An entry on the right side of an account.
- Normal balance
- The side (debit or credit) on which an account increases.
References and provenance
- OpenStax, Principles of Accounting, Volume 1: Financial Accounting (accessed 2026-10-29)
Original lesson written for Bookkeeping Exercises (AI-assisted drafting). Calculations are verified by the platform's automated accounting tests. Not yet reviewed by a credentialed accountant. Updated 2026-10-29.