In accounting, there are many principles, concepts, rules, formats, etc. that help in doing accounting work in a better way and one of them is debit which is used along with credit because both of them cannot be used separately. Whenever debit is used then credit will also be used and whenever credit is used then debit will also be used. In simple language, these are two sides of a coin, i.e., two sides of a transaction, one debit and one credit.
In detail, in accounting transactions are recorded in the books as per the dual aspect principle which means every transaction has two aspects one of which is debit, and the other is credit. For example, sale is made on cash, in this case cash account is debited and the sales account is credited, in the case of a cash purchase, the purchase account is debited, and the cash account is credited.
Table of Contents
What is Debit?
Debit is a concept in accounting that represents an aspect (side) of a transaction, and it is always equal to credit as both are based on the accounting equation (debit = credit / asset = capital + liability). The word Dr. is also used to represent debit, and it is the short form of debit. While recording the transactions in the books the account which is debited is recorded on the left-hand side. Which side of the transaction will be debited is determined by accounting rules which are also known as the rules of debit and credit.
If we look at it according to accounting rules, in the personal account, the receiver will be on the debit side, in the real account, whatever comes will be on the debit side, and in the nominal account, all expenses and losses will be on the debit side. If we look at it according to the category, then expenses, assets, etc. will come on the debit side, and capital, liability, revenue, etc. will come on the credit side.
Traditional Approach
| Personal Account | – Debit – The Receiver – Credit – The Giver |
| Real Account | – Debit – What Comes In – Credit – What Goes Out |
| Nominal Account | – Debit – All Expenses/Losses – Credit – All Income/Gains |
Modern Approach
| Asset | – Debit – To Increase – Credit – To Decrease |
| Capital | – Debit – To Decrease – Credit – To Increase |
| Expense | – Debit – To Increase – Credit – To Decrease |
| Liability | – Debit – To Decrease – Credit – To Increase |
| Revenue | – Debit – To Decrease – Credit – To Increase |
Features of Debit
Following are the features of debit:
1. Concept:
Debit is a concept in accounting that helps in managing/recording transactions in the books as per accounting principles. It represents one side of a transaction because as per the dual aspect accounting principle every transaction has two sides in which one side increases something and the other side decreases something or vice versa.
2. Equal to Credit:
Debit is always equal to credit, as both these are important parts of the dual aspect accounting principle and according to this principle every transaction has two sides and the value of both sides is equal. If this principle is used to manage transactions, then it is mandatory to follow the concept of debit and credit in jurisdictions with other accounting principles.
3. Rules Apply:
In this, the rules of debit and credit apply because which account will be debited depends on the rules. For example, if the purchase is made on cash, then the purchase account is debited and the cash account is credited. Similarly, if the sale is made in cash, then the cash account is debited and the sales account is credited.
4. Recorded on the Left Side:
Due to the dual aspect accounting principle, every transaction has two sides, and hence every account is divided into two parts, one is the debit part which is also called the left-hand side, and the other is the credit part which is also called the right-hand side, hence every debit transaction is recorded on the left side of the account and every credit transaction is recorded on the right side of the account.
5. Increase and Decrease
A debit increases the balance of asset, expense, etc., and decreases the balance of capital, revenue, liability, etc. and this is due to the rule of accounting i.e. rule of debit and credit which is also called the golden rule of accounting. For example, in the case of cash sales, the asset (cash) increases because the asset is debited similarly in the case of cash purchases the expense (purchases) increases because the expense is debited.
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QNA/ANS
Q1. What is debit?
Ans: Debit is a concept in accounting that represents an aspect (side) of a transaction.
Q2. Is debit equal to credit?
Ans: Yes, debit is equal to credit as both are based on dual aspect principle.
Q3. Write the abbreviation of debit.
Ans: Dr.
Q4. On which side of the ledger account is the debit transaction recorded?
Ans: A debit transaction is recorded on the left side of the ledger account.
Q5. Write the features of debit.
Ans: Following are the features of debit:
1. It is a concept in accounting.
2. It represents one aspect (side) of a transaction.
3. It is always equal to credit.
4. It is a part of the accounting equation.
5. It is abbreviated as Dr.
6. It is not used without credit.
7. It is based on the dual aspect accounting principle.
8. It follows the rule of debit and credit.
9. It is recorded on the left side of the ledger.
10. It increases assets, expenses, etc.
11. It decreases capital, liabilities, revenue, etc.
