Debit and credit
Debit and credit are the two equal sides of every accounting entry under double-entry bookkeeping.
Also known asDr/Cr
FrameworkDouble-entry bookkeeping
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A side-by-side comparison sets out the two sides of double-entry bookkeeping: a debit entry increases assets or expenses, while a credit entry increases liabilities, equity, or revenue. The worked example shows paying a €3,000 supplier invoice: Accounts Payable is debited by €3,000 (reducing the liability) and Cash is credited by €3,000 (reducing the asset), keeping both sides of the accounting equation in balance.
Where it fits
SubjectFinancial AccountingCoreTopicDouble-Entry & the Bookkeeping CycleCore
Check yourself
PracticeCORE
A business pays €3,000 cash to settle an outstanding supplier invoice. Which journal entry correctly records this transaction?
Select an answer to check your understanding.