Course Outline
Join PRO

What is the meaning of debit?

Author:
Harold Averkamp, CPA, MBA

Definition of Debit

The term debit is similar to the term used in Italy more than 500 years ago when the double entry accounting system was documented. What you need to know today is that debit means left or left side. For example, every accounting entry will have a debit entered on the left side of a general ledger account. (There will also need to be a credit amount entered on the right side of another account.) The abbreviation for debit is dr. (which is also related to the term from 500 years ago).

Since the general ledger accounts have both a debit and credit side, or left and right side, the balance in a general ledger account will be either a debit balance or a credit balance.

Within the general ledger, these accounts are expected to have debit balances: assets, expenses, and the owner’s drawing account. The debit balances will be increased when additional debit amounts are entered, and will be decreased when credit amounts are entered.

Examples of Debit

To illustrate the term debit, let’s assume that a company has cash of $500. Therefore, the company’s general ledger asset account Cash should indicate a debit balance of $500. If the company receives an additional $200, a debit of $200 will be entered and will result in the Cash account having a debit balance of $700.

Sometimes the word charge is used in place of debit. For example, if a company spends $300 for advertising, a credit of $300 will be recorded in the Cash account, and an accountant might add “…and charge Advertising Expense for $300.” Another accountant might say “…and debit Advertising Expense for $300.”

Join PRO to Track Progress
Must-Watch Video

Learn How to Advance Your Accounting and Bookkeeping Career

  • Perform better at your current job
  • Refresh your skills to re-enter the workforce
  • Pass your accounting class
  • Understand your small business finances
Watch the Video

Join PRO or PRO Plus and Get Lifetime Access to Our Premium Materials

Read all 2,645 reviews

Features

PRO

PRO Plus

Features
Lifetime Access (One-Time Fee)
Explanations
Quizzes
Q&A
Word Scrambles
Crosswords
Bookkeeping Video Training
Financial Statements Video Training
Flashcards
Visual Tutorials
Quick Tests
Quick Tests with Coaching
Cheat Sheets
Business Forms
All PDF Files
Progress Tracking
Earn Badges and Points
Certificate - Debits and Credits
Certificate - Adjusting Entries
Certificate - Financial Statements
Certificate - Balance Sheet
Certificate - Income Statement
Certificate - Cash Flow Statement
Certificate - Working Capital
Certificate - Financial Ratios
Certificate - Bank Reconciliation
Certificate - Payroll Accounting

About the Author

Harold Averkamp

For the past 52 years, Harold Averkamp (CPA, MBA) has worked as an accounting supervisor, manager, consultant, university instructor, and innovator in teaching accounting online. He is the sole author of all the materials on AccountingCoach.com.

Learn More About Harold

Certificates of
Achievement

Certificates of Achievement

We now offer 10 Certificates of Achievement for Introductory Accounting and Bookkeeping:

  • Debits and Credits
  • Adjusting Entries
  • Financial Statements
  • Balance Sheet
  • Income Statement
  • Cash Flow Statement
  • Working Capital and Liquidity
  • Financial Ratios
  • Bank Reconciliation
  • Payroll Accounting
Badges and Points
  • Work towards and earn 30 badges
  • Earn points as you work towards completing our course
View PRO Plus Features
Course Outline
Take the Tour Join Pro Upgrade to Pro Plus