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.
