Debit definition
/What is a Debit in Accounting?
A debit is an accounting entry that either increases an asset or expense account, or decreases a liability or equity account. It is positioned to the left in an accounting entry. In journal entries, a debit may be indicated with the abbreviation “dr.” The reverse of a debit is a credit. In a journal entry, a debit is listed first, after which the credit is listed.
In double entry accounting, the total amount of debits entered in an accounting transaction should match the total amount of credits entered. The result is considered a balanced transaction. If there is an imbalance between the debit and credit totals, then financial statements cannot be produced.
What is a Debit in Banking?
In banking, a debit refers to a deduction in one's bank account, as may occur when a check payment or a bank servicing fee is applied. Debits are the opposite of credits, which add money to an account. In personal banking, debits show up on statements with a negative effect on your balance, while credits have a positive effect.
FAQs
Can Liabilities Ever Have a Debit Balance?
Liabilities can have a debit balance, though it is unusual. This typically occurs when a company overpays a debt or records an error that results in a negative liability. For example, if a vendor is paid more than the outstanding balance, the accounts payable account may show a temporary debit balance.