An accounting entry that increases asset and expense accounts, and decreases liability, equity, and revenue accounts. Always recorded on the left side of a T-account.
Debit is one of the two fundamental sides of double-entry bookkeeping. The confusion for most people: "debit" does not simply mean money going out. Its effect depends entirely on the account type being debited.
The rule: Debiting an asset or expense account increases it. Debiting a liability, equity, or revenue account decreases it. Assets and expenses have "normal debit balances" — they increase when debited and decrease when credited. Liabilities, equity, and revenue have "normal credit balances" — they increase when credited.
In practice: Kalayaan Hardware buys ₱50,000 in inventory on credit. Two accounts are affected: Inventory (an asset — normal debit balance) is debited ₱50,000 → it increases. Accounts Payable (a liability — normal credit balance) is credited ₱50,000 → it increases. Both sides make sense: the hardware store has more inventory and owes more money.
Why it matters: Misunderstanding debits and credits is the root cause of many bookkeeping errors. Business owners reviewing their accounts should know: if their Cash account (asset) has a credit balance, something is wrong — cash cannot be negative in normal operations. Recognizing these "red flags" from your own accounting records helps catch errors early.
A helpful memory aid used by accounting students: DEAD CLIC. Debit: Expenses, Assets, Drawings increase. Credit: Liabilities, Income, Capital increase.