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Debit: Definition and Meaning
Definition
A debit is an entry on the left side of an account. Whether a debit increases or decreases an account depends on the type of account involved.
Why It Matters
Debits are part of double-entry accounting. Every transaction must be recorded so that total debits equal total credits. Understanding this concept helps users follow the flow of transactions through the general ledger.
In general, debits increase assets and expenses, while they decrease liabilities, equity, and revenue accounts. Specific entries depend on the facts of each transaction.
Example
When a business pays a vendor bill that was previously recorded in accounts payable, it may debit accounts payable and credit cash.
Related Terms
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