Debits and Credits

After you have identified the two or more accounts involved in a business transaction, you must debit at least one account and credit at least one account.

To debit an account means to enter an amount on the left side of the account. To credit an account means to enter an amount on the right side of an account.

Debit means left
Credit means right

Generally these types of accounts are increased with a debit:

     Dividends (Draws)
     Expenses
     Assets
     Losses

You might think of D – E – A – L when recalling the accounts that are increased with a debit.

Generally these types of accounts are increased with a credit:
     Gains
     Income
     Revenues
     Liabilities
     Stockholders' (Owner's) Equity

You might think of G – I – R – L – S when recalling the accounts that are increased with a credit.

To decrease an account you do the opposite of what was done to increase the account. For example, an asset account is increased with a debit. Therefore it is decreased with a credit.

The abbreviation for debit is dr. and the abbreviation for credit is cr.