Glossary
Debit
An entry on the left side of an account; it increases assets and expenses and decreases liabilities, capital and income.
What it means
The left-hand side of a ledger account; a debit entry records value received or an increase in an asset or expense.
Example
When cash comes in, the cash account is debited.
Why it matters
Knowing which side to debit is half of every double-entry decision.
In practice
A debit is posted on the left-hand side of a ledger account. It increases assets and expenses but decreases liabilities, capital and income. That is why an asset such as machinery has a debit balance and appears in the debit column of the trial balance.
Suppose a business receives RM500 cash from a customer paying an invoice. The cash account is debited RM500 (an asset rises) and the customer's receivable account is credited RM500 (that asset falls).
Debit and credit are easy to mix up because their effect depends on the type of account. A helpful check is that debit increases the things the business holds or spends. Credit increases the things that fund the business or that it earns.
Reversing a debit and a credit still lets the trial balance agree, but it records the transaction backwards. The error passes the arithmetic check yet distorts the accounts.
If you often put entries on the wrong side, one of our teachers can check your past-paper ledger accounts with you line by line. Book a trial class.
Related terms
Syllabus reference: Cambridge 0452 and 0985, syllabus for 2027 to 2029, sub-topic 2.1 The double entry system of book-keeping (page 12).
Definitions here are general accounting explanations for study. For your board's exact wording, see its official syllabus via Sources.
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