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Accounting: Debits vs. Credits

Updated on October 12, 2015
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Debits and Credits

Debits and credits are a way of tracking accounts, particularly ones that are involved in the same transaction. These transactions are tracked using t-accounts, where debits are recorded on the left, and credits are recorded on the right.

Debits include assets, owner's withdrawals, and expenses.

Credits include liabilities, owner's capital, and revenue.

See below for examples!


 
Asset/Liability/Etc.
Debit or Credit
Accounts Receivable
Asset
Debit
Owner, Capital
Equity
Credit
Accounts Payable
Liability
Credit
Owner, Drawing
Equity
Debit
Fees Earned
Revenue
Credit
Rent Expense
Expense
Debit

Accounts to Consider

The following list displays accounts involved in transactions, along with the appropriate transactions should the account be increasing. Accounts involved in transactions could include:

  • Cash - debit
  • Accounts Receivable - debit
  • Accounts Payable - credit
  • Supplies - debit
  • Prepaid Insurance - debit
  • Equipment - debit
  • Notes Payable - credit
  • Owner Capital - credit
  • Owner Withdrawals - debit
  • Fees Earned - credit
  • Wages Expense - debit
  • Rent Expense - debit
  • Utilities Expense - debit
  • Miscellaneous Expense - debit
  • Insurance Expense - debit

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