In accounting, are debit balances good?

It is best if you accept the meaning that the word debit has had for 500 years: a debit is an amount entered on the left-side of an account. Don’t add “good” or “bad” or “add” or “subtract” or other meanings.

If you associate the word “good” with debits, you will have a problem when it comes to expenses. After all, expenses have debit balances. Since expenses will reduce a company’s profits, they are not good.

Lots of people have tried to make debit mean something more than left side. It never works. That’s why after 500 years we are still using the unusual word debit.

Learn more about Debits & Credits.

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