In a journal entry, where do the debit and the credit sit?
Choose an answer, then check it.
Accounting · Foundations
Debits and Credits
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In 30 seconds
Debit The left side of an account or journal entry; under the rules, assets and expenses increase on the debit side. Full entry → and Credit The right side of an account or journal entry; under the rules, liabilities, equity, and revenue increase on the credit side. Full entry → are the two sides of every Journal The chronological record where transactions first enter the accounting system, often called the book of original entry; journal entries have their own lesson. Full entry → Entry The written record of one transaction, showing the accounts affected and the debit and credit amounts; journal entries have their own lesson. Full entry →: debit is the left side, credit is the right — the this lesson draws its working definition from OpenStax's Principles of Accounting. Neither word means good or bad. The rules, named: assets and expenses increase with debits; liabilities, equity, and revenue increase with credits. Every entry records equal debits and credits, and that balance is what keeps the accounting equation balanced. One small set of rules runs the whole system.
Why this matters
Without a shared convention for left and right, two bookkeepers would record the same sale differently, and no two sets of books would match. Debits and credits are that convention: a fixed meaning for each side of an Account The record of increases and decreases in one item a business tracks, such as Cash, Supplies, or Service Revenue. Full entry → that every business uses. The rules matter for reading the books — a lender or manager who sees that cash was credited knows cash went down, without asking. They matter academically: nearly every later accounting topic — journal entries, the ledger, the trial balance, the financial statements — assumes this convention. And they matter practically: because every entry must balance, the system catches its own mistakes. Learn the rules once, and the rest of accounting builds on them.
The college version
What debits and credits are
OpenStax's Principles of Accounting shows the journal as the first place information enters the accounting system — the book of original entry — with columns labeled debit and credit: the debit is on the left side, the credit on the right. CFI states the same arrangement. So in the books, debit and credit are names for positions, not judgments: a debit is an amount placed on the left side of an account, a credit an amount on the right. That is the whole working definition, and it carries no good or bad meaning — a debit increases some accounts and decreases others, depending on which account it touches.
The rules, named
Five account types, each with one line. Assets increase with debits and decrease with credits: OpenStax states outright that assets increase on the debit side and decrease on the credit side. Expenses increase with debits too — in OpenStax's examples, a utility bill and salaries are debits to expense accounts. Liabilities increase with credits: OpenStax shows Accounts Payable growing on the credit side. Equity increases with credits: issuing stock for cash credits Common Stock, an equity account. Revenue increases with credits: service revenue is credited when services are provided. CFI compresses the same idea into one line: debit the asset or expense account and credit the liability or income account when balances increase. Two families, one rule per type — that is the entire rulebook.
Why the rules exist
The rules exist to keep the accounting equation balanced. The equation — assets equal liabilities plus equity — is a sibling topic with its own lesson, so it appears here only as the reason for the convention. Double-entry recording means every transaction enters with at least one debit and one credit, and the totals must match: CFI notes that every debit has a corresponding credit of equal amount. OpenStax shows the payoff: once journal entries are posted, the business checks that the accounting equation remains balanced. Take the simplest case — a company issues $20,000 of stock for cash: Cash (an asset) is debited, Common Stock (equity) is credited, and both sides of the equation rise together. The left-right convention is not arbitrary; it is the mechanism that makes the equation checkable.
T-accounts: the two-column picture
A T-account The simple two-column picture of an account, shaped like the letter T, with the debit side on the left and the credit side on the right. Full entry → is the simple two-column picture of a single account. Draw one vertical line with a horizontal line across the top and the account name above it, and you have the letter T: the left column is the debit side, the right column is the credit side. OpenStax uses exactly this shape when posting journal information to the ledger — each debit in the journal lands on the debit side of its account's T, each credit on the credit side. Every account in the system looks the same: a name on top, two columns, amounts on whichever side the rules dictate. The T-account is a picture, not a separate record — journal entries and the general ledger have their own lessons, so it appears here only as the way to see an account's two sides at a glance.
Debit and credit in action
Put the rules to work with an original example. Cedar & Pine Workshop, a repair shop, buys $420 of printer paper and ink with cash from the register. Two accounts change, and both are assets. Supplies increases, and assets increase with debits — so Supplies is debited $420. Cash decreases, and assets decrease with credits — so Cash is credited $420. In words, the two T-accounts look like this:
Debit and credit in action (continued)
The Supplies T-account shows $420 on its debit (left) side; the Cash T-account shows $420 on its credit (right) side. One asset up, one asset down, equal amounts — the entry balances, and the equation stays balanced because the shop still owns the same total value in a different form. One more: on Tuesday the shop sells $600 of repair services for cash. Cash (an asset) increases, so Cash is debited $600; Service Revenue increases, and revenue increases with credits, so Service Revenue is credited $600. Same structure every time: identify what changed, apply the one-line rule, check that the two sides match.
The common confusion
In everyday speech, credit sounds good and debit sounds bad: we praise a person as a credit to the team and wince when the bank debits a fee. In accounting, neither word is a verdict. A credit to a liability increases it — a credit card balance grows by credits. A debit to an expense increases it — recording a cost is a debit, and there is nothing shameful about it. The confusion is understandable: the same words do different jobs in everyday life. Inside the books, debit means left and credit means right; what a side does to a balance depends on the account type, nothing else.
The honest framing
Here is the reality check: the entire system rests on one small set of rules. Five account types, two sides, one rule per type — learn that once, and every later topic, from journal entries to the financial statements, follows the same logic. The rules do not change by industry or company size; a corner grocery records purchases the same way a chain does. What changes with size is the volume of entries and the software, never the convention. The honest framing is that debit and credit rules are the fixed grammar of accounting — the real work is recognizing transactions in the real world, not the grammar itself.
Eli explains
The same idea, in plain words
Explain it like I’m 10
Debit and credit are names for the two sides of every entry. Write the account name, then put the amount on the left for a debit or on the right for a credit. Which side you use depends on the account, not on whether the news is good. Assets and expenses grow on the debit side; liabilities, equity, and revenue grow on the credit side. So the loan you take out credits a liability, making it grow, and the cash you receive debits an asset, making it grow too. Every transaction must place equal totals on both sides. If the sides match, the entry is balanced — and a balanced entry is what keeps the accounting equation in balance. That is the whole idea: two sides, five account types, one rule each.
Picture it like this
Think of a seesaw. Every transaction is a set of weights: whatever you place on the left (debit) side must be matched by equal weights on the right (credit) side, or the seesaw tips. The account-type rules tell you which side each kind of item belongs on: assets and expenses sit on the left, while liabilities, equity, and revenue sit on the right. Buy supplies with cash and you put a weight on Supplies' left side and a matching weight on Cash's right side — the seesaw stays level.
Where the picture stops working
A seesaw has only two ends, but one entry can touch several accounts on each side at once — accountants call that a compound entry. And a level seesaw only proves the weights match; it cannot tell you that the weights were set on the right spots. A balanced entry is consistent, not automatically correct.
Worked example
Cedar & Pine Workshop, a fictional repair shop, starts its week with two transactions. Monday: the owner buys $420 of printer paper and ink with cash from the register. Supplies (an asset) increases, so Supplies is debited $420; Cash (an asset) decreases, so Cash is credited $420. In the T-account picture, the Supplies account shows $420 on its debit side and the Cash account shows $420 on its credit side — one asset up, one asset down, totals equal. Tuesday: the shop sells $600 of repair services for cash. Cash increases, so Cash is debited $600, and Service Revenue increases, so Service Revenue is credited $600. Both entries balance, and after each one the accounting equation still balances. That is the whole mechanic: identify the accounts that changed, apply the one-line rule for each type, and confirm the two sides match.
Key takeaway
Debit means left and credit means right; assets and expenses grow on the debit side, while liabilities, equity, and revenue grow on the credit side — and because every entry balances, the whole system checks itself.
Quick check
3 questions here, of 5 in this lesson’s practice set. Answers stay hidden until you check.
Cedar & Pine Workshop buys $420 of printer supplies with cash from the register. Which entry records the transaction?
Choose an answer, then check it.
A café pays a $150 electricity bill with cash. Which side of which account increases?
Choose an answer, then check it.
Study tools & related lessonsYou’ll learn to · Common mistakes · Easily confused · Key vocabulary · Related
You’ll learn to
- Define debit and credit as the two sides of every journal entry, using the working definition from OpenStax's Principles of Accounting: debit is the left side, credit is the right.
- Name the rules for the five account types, each in one line: assets and expenses increase with debits; liabilities, equity, and revenue increase with credits.
- Explain why the rules exist: every entry records equal debits and credits, which keeps the accounting equation balanced.
- Describe a T-account as the two-column picture of an account, with the debit side on the left and the credit side on the right.
- Apply the rules to a cash purchase of supplies: debit Supplies, credit Cash.
- Distinguish debits and credits from good and bad: neither side carries a judgment on its own.
Common mistakes
Thinking debit means bad and credit means good.
Debit and credit only name the left and right sides of an account; a debit increases assets and expenses but decreases liabilities, equity, and revenue, so neither side carries a judgment.
Assuming a credit always increases an account.
A credit increases liabilities, equity, and revenue, but it decreases assets and expenses — the effect depends on the account type, not the word.
Recording a cash purchase of supplies as a credit to Supplies.
Supplies is an asset, and assets increase with debits, so buying supplies is a debit to Supplies; the cash you give up is the credit to Cash.
Expecting every entry to have exactly one debit and one credit.
Simple entries have one of each, but compound entries touch several accounts on one or both sides; what must always hold is that total debits equal total credits.
Treating a balanced entry as proof that the record is correct.
Balance only means the two sides match; an entry recorded in the wrong account, or a transaction missed entirely, still leaves the books balanced.
Easily confused
Debit vs. Credit
Debit is the left side of an account and credit is the right side; every entry has both, and each side increases some account types while decreasing others.
Simple entry vs. Compound entry
A simple entry has one debit and one credit; a compound entry has several accounts on one or both sides — both must end with equal debit and credit totals.
Everyday 'credit' vs. Accounting credit
Everyday speech uses credit for praise or for borrowing; in the books, a credit is the right side, which increases liabilities, equity, and revenue and decreases assets and expenses.
Key vocabulary
- Debit
- The left side of an account or journal entry; under the rules, assets and expenses increase on the debit side.
- Credit
- The right side of an account or journal entry; under the rules, liabilities, equity, and revenue increase on the credit side.
- Journal
- The chronological record where transactions first enter the accounting system, often called the book of original entry; journal entries have their own lesson.
- T-account
- The simple two-column picture of an account, shaped like the letter T, with the debit side on the left and the credit side on the right.
- Double-entry system
- The way of recording in which every transaction is entered with equal debits and credits, touching at least two accounts.
- Entry
- The written record of one transaction, showing the accounts affected and the debit and credit amounts; journal entries have their own lesson.
- Account
- The record of increases and decreases in one item a business tracks, such as Cash, Supplies, or Service Revenue.
Sources & references
- Principles of Accounting, Volume 1: Financial Accounting, Section 3.5: Use Journal Entries to Record Transactions and Post to T-Accounts — OpenStax, Rice University
- Debit Credit Analysis — Corporate Finance Institute (CFI)
- Accounting Equation — Corporate Finance Institute (CFI)
- Principles of Accounting, Volume 1: Financial Accounting, Section 3.2: Define and Describe the Expanded Accounting Equation and Its Relationship to Analyzing Transactions — OpenStax, Rice University
EliExplains lessons are original prose written from the open, credible references above. See Copyright & Licensing.
Researched 2026-08-21
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