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Bookkeeping › Books of Prime Entry

What is the difference between a debit and a credit?

Beginner

Answer

In double entry, a debit is an entry on the left of an account and a credit on the right. Debits increase assets, expenses, and drawings and decrease liabilities, income, and capital; credits do the opposite. Which to use depends on the account type and the effect of the transaction.
Assets/Expenses/Drawings: increase = Debit. Liabilities/Income/Capital: increase = Credit.
Real-world example Receiving cash is a debit to cash (asset up); making a sale is a credit to sales (income up).

Common follow-ups: Does a debit always mean an increase? | Which accounts increase with a credit?