How to learn debit and credit in a better way?

Understanding and memorizing the concept of debit and credit is not only important for the accountants but it is also important for a common man to have a good understanding of transactions. In order to learn debit and credit, you must have good idea about the three elements of accounting equation that are liabilities, equity and assets and along with that you must understand that tie between expenses and income to the equity. If you can understand the above logical concepts, you can get a clear understanding about debit and credit.


Debit is actually the entry on the left of the account while credit is the entry on the right side. However, the balances that are shown and written on the left side including expense accounts and assets account are known as debit accounts. Along with that, the account balances in right side are known as credit accounts and these accounts include profit accounts, revenue and equity accounts. Here are some of the useful tips that can develop a clear understanding of debits and credits in your mind:


Try to learn debit and credit through bookkeeping:

Debit performs two main functions; it either increases the value of debit account while it can also reduce the value of credit account. For example by entering a debit account, you can have an increase in expense of equity or else there will be increase in liability.

On the other hand, credit also puts an impact on the accounts; it either increases the value of credit accounts or decreases the value of debit accounts. For example by entering the value on credit side, there can be an increase in profit or loss or there can be decrease in assets.


Remember and Learn this Rule:

These accounts generally result in increase of debit: Dividends, Assets, Expenses and Losses or you can write it as DEAL. On the other hand, these accounts are increased in result of a credit entry: Gains, Revenue, Liability, Income and Stockholders’ Equity or you can also learn the GIRLS. These two words can create an ease for you to learn debit and credit.


Balance the Entries:

Make sure that there is a balance in bookkeeping between debit and credit entries for accuracy.

Always keep in mind that the expense accounts are debited. For example, if a firm pays for its rent expense in a month then it will debit the rent amount. If it pays for its advertisement to the radio, the ad expense will also be debited. In Addition to this, the revenue accounts are credited always. For example, if a company sells its products then the sales amount will be credited.

If a company gives a check then it will it will mention it in assets accounts of credit however if a firm gets some money, it will be entered in debit account

While adding the different entries into the balance sheet or ledger, make sure that the entries are equal on the debit as well as credit side. For more information visit us