Debit

Definition of Debit

Debit is a financial term that refers to the recording of a transaction that results in an increase in an asset, expense, or draw account or a decrease in a liability, equity, or revenue account in a company's accounting records.

Debit entries are typically made on the left side of the accounting ledger, and they represent the inflow of assets or the outflow of liabilities.

In double-entry accounting, debits must be balanced by an equal and opposite credit entry to maintain the accounting equation.

What is Debit?

Debit is a fundamental concept in accounting used to record transactions that involve the increase or decrease of specific accounts in a company's financial records. When an asset is acquired, an expense is incurred, or an owner withdraws funds from the business, a debit entry is made to reflect the increase in the relevant account. Debits are an essential part of the double-entry accounting system, where every transaction affects at least two accounts, with one account being debited and another account being credited. This ensures that the accounting equation (Assets = Liabilities + Equity) remains balanced after each transaction.