What Are Debits And Credits In Accounting

An Account has both Debit And Credit Sides. It also increases or decreases according to the Rules of Debit And Credit. The Difference Between Debit And Credit is that Debit is on the Left Side while Credit is on the Right Side of an account.

What is a Debit In Accounting

Debit means Left side of an Account. Assets and Expenses normally have debit balance on Debit Side. When these Types of Accounts increase, we debit these one. Debit for an account is shown below:

                                                             Assets Account

                  Debit Side

                        Or

                   Credit Side

Debit Side of asset and expense t-accounts shows increase in Assets And Expenses Accounts but for liabilities, equity and revenue t-accounts, it shows decrease in Liabilities, Capital or Equity and Revenues / Income Accounts.

What is a Credit In Accounting

Credit means Right Side of an Account. Right side of an account shows increase in Liabilities, Equity / Capital and Revenues while it shows decrease in Assets and Expenses. The favourable balance of Capital / Equity, Liabilities and Revenues is always on Credit Side while it is a unfavourable or negative balance for assets and expenses.

                                                      Capital Account

                                                                                                 Right Side

                                                                                                       Or

                                                                                                   Credit Side