Accounting Debit and Credit Cards Terms

Asset

Debit → INCREASE

Credit → DECREASE

Normal balance: DEBIT

Examples: Cash, Accounts Receivable, Inventory, Supplies, Equipment, Prepaid Expenses

Liability

Amounts owed to creditors.

Debit → DECREASE

Credit → INCREASE

Normal balance: CREDIT

Examples: Accounts Payable, Notes Payable, Deferred Revenue

Stockholders' Equity

Owners' claims to company resources.

Debit → DECREASE

Credit → INCREASE

Normal balance: CREDIT

Common Stock

Amount shareholders have invested in the business.

Debit → DECREASE

Credit → INCREASE

Normal balance: CREDIT

Retained Earnings

Cumulative net income that has not been distributed to stockholders as dividends.

Debit → DECREASE

Credit → INCREASE

Normal balance: CREDIT

Revenue

Amounts earned from selling products or services.

Debit → DECREASE

Credit → INCREASE

Normal balance: CREDIT

Examples: Service Revenue, Sales Revenue

Expense

Costs of providing products and services.

Debit → INCREASE

Credit → DECREASE

Normal balance: DEBIT

Examples: Rent Expense, Salaries Expense, Utilities Expense

Dividend

Debit → INCREASE

Credit → DECREASE

Normal balance: DEBIT

⚠️ Dividends reduce retained earnings.

Cash

Asset

Debit → INCREASE

Credit → DECREASE

Normal balance → DEBIT

Accounts Receivable

Asset

Debit → INCREASE

Credit → DECREASE

Normal balance → DEBIT

Inventory

Asset

Debit → INCREASE

Credit → DECREASE

Normal balance → DEBIT

Supplies

Asset

Debit → INCREASE

Credit → DECREASE

Normal balance → DEBIT

Prepaid Expenses

Asset

Debit → INCREASE

Credit → DECREASE

Normal balance → DEBIT

Equipment

Asset

Debit → INCREASE

Credit → DECREASE

Normal balance → DEBIT

Accounts Payable

Liability

Debit → DECREASE

Credit → INCREASE

Normal balance → CREDIT

Notes Payable

Liability

Debit → DECREASE

Credit → INCREASE

Normal balance → CREDIT

Deferred Revenue

Liability

Debit → DECREASE

Credit → INCREASE

Normal balance → CREDIT

Service Revenue

Revenue

Debit → DECREASE

Credit → INCREASE

Normal balance → CREDIT

Rent Expense

Expense

Debit → INCREASE

Credit → DECREASE

Normal balance → DEBIT

Salaries Expense

Expense

Debit → INCREASE

Credit → DECREASE

Normal balance → DEBIT

Utilities Expense

Expense

Debit → INCREASE

Credit → DECREASE

Normal balance → DEBIT