Debit and Credit
Most people understand debit and credit in their bank checking account. Simply credit means you have more money in your bank account, and debit is less. In accounting, this credit and debit is a totally different animal. If you want to learn bookkeeping, you need to forget about traditional concept of credit and debit.
| Debit (Dr) | Credit (Cr) | |
| Asset | Increase | Decrease |
| Liability | Decrease | Increase |
| Revenue | Increase | |
| Expense | Increase | |
| Equity | Decrease | Increase |
E.g. You purchase a book with your credit card of $20:
- Increase credit card liability – debit liability
- Increase expense – debit expense
You enter in the book as follows:
| Dr | Cr | |
| Liability | $20 | |
| Expense | $20 |
