- The abbreviation for "Debit" is "Dr".
- The abbreviation for "Credit" is "Cr".
- The term debit and credit in bookkeeping and accounting simply denote an increase or decrease to the balance of a referenced business account.
- In double-entry system every business transaction is recorded in at least two accounts, one will be debit entry and another one is credit entry.
- The initial challenge with double-entry is to know which account should be debited and which one should be credited.
- Generally following types of accounts are increased with debit.
- Dividends(Draws)
- Expenses
- Assets
- Losses
- The following types of accounts are increased with credit.
- Gains
- Income
- Revenue
- Liability
- Stockholder's(owner's) Equity
- To decrease an account we do the opposite of what was done to increase to increase the account.
- To debit an account means to enter an amount on the left side of the account.
- To credit an account means to enter an amount on the right side of the account.
Examples:
