What is a Debit?

Definition: Debits are part of the most fundamental accounting concepts, representing one of the two sides of every transaction recorded.

Debit is a formal bookkeeping and accounting term that comes from the Latin word debere, which means "to owe".

A debit is an expense, or money paid out from an account, that results in the increase of an asset or a decrease in a liability or owners equity. Debit is the positive side of a balance sheet account, and the negative side of a result item.

In bookkeeping, debit is an entry on the left side of a double-entry bookkeeping system that represents the addition of an asset or expense or the reduction to a liability or revenue. The opposite of a debit is a credit.

In double-entry bookkeeping, debits and credits are kept in separate columns allows for each to be recorded independently from the other minimizing mistakes.

An overview of debit in accounting

  • To debit a debtor account implies a reduction of debt
  • To debit an asset account implies that the assets increase
  • To debit an income account implies that income decreases
  • To debit an expense account implies that the cost increases

Increased accounts

A debit will increase these accounts:

  • Assets (Cash, Accounts Receivable, Inventory, Land, Equipment, etc.)
  • Expenses (Rent Expense, Wages Expense, Interest Expense, etc.)
  • Losses (Loss on Sale of Assets, Loss from Lawsuit, etc.)
  • Sole proprietor's Drawing account

Decreased accounts

A debit will decrease these accounts:

  • Liabilities (Notes Payable, Accounts Payable, Interest Payable, etc.)
  • Stockholders' Equity (Common Stock, Retained Earnings)

Debit balance

Balance remaining after one or a series of bookkeeping entries. This amount represents an asset or an expense of the entity.