Debits and credits: the one-table cheat sheet

Debits go on the left, credits go on the right, and every entry's debits must equal its credits. What a debit does — increase or decrease — depends only on the account type. One table settles it permanently.

The table

Which side increases each of the five account types.

Account type	Increases with	Decreases with	Normal balance
Assets	Debit	Credit	Debit
Expenses	Debit	Credit	Debit
Liabilities	Credit	Debit	Credit
Equity	Credit	Debit	Credit
Revenue	Credit	Debit	Credit

"Normal balance" is the side the account usually carries. An asset with a credit balance (a negative bank account, an overpaid customer) is your ledger waving a flag.

Retire the mnemonic, keep the equation

Generations of students memorized DEALER — Draws, Expenses, Assets on the debit side; Liabilities, Equity, Revenue on the credit side. It works, but it teaches recall without understanding, and it fails you the first time you meet a contra account.

Derive it instead from the accounting equation, Assets = Liabilities + Equity:

Assets sit on the left of the equation, so they grow on the left of the account: debit.
Liabilities and equity sit on the right, so they grow on the right: credit.
Revenue makes the owners richer — it grows equity — so it grows like equity: credit.
Expenses make the owners poorer — anti-equity — so they grow the opposite way: debit.

Draws and contra accounts stop being exceptions: an owner draw shrinks equity, so it grows with a debit, exactly as the logic predicts. The full derivation, worked through a business's first week, is in double-entry explained.

See it in two T-accounts

T-account — Cash (asset)

Cash (asset)

Debit	Credit
Client payment1,200	Rent paid950
Owner investment5,000

Asset: debits (left) increase, credits (right) decrease. Balance: 5,250 debit.

T-account — Accounts payable (liability)

Accounts payable (liability)

Debit	Credit
Paid vendor300	Bill received800

Liability: mirror image. Credits increase what you owe; debits pay it down. Balance: 500 credit.

And one balanced entry using both directions at once:

Journal entry — Paying a vendor bill

Account	Debit	Credit
Accounts payable	300
Cash		300

Debit shrinks the liability; credit shrinks the asset. Debits equal credits, as always.

Why the bank statement seems backwards

Your bank statement calls deposits "credits" because it is the bank's ledger, not yours. Your deposit is money the bank owes you — a liability on the bank's books — and liabilities increase with credits. Same table, other side of the counter. On your books, the deposit is a debit to Cash.

Keep the table taped where you work until deriving it is automatic — usually about two weeks of real entries. When an entry still feels ambiguous, draw the T-account and ask which side the balance should grow on; the answer falls out. Then confirm your work the way the system intends: run a trial balance and check that total debits equal total credits.

Frequently asked questions

Which accounts are increased by a debit?

Assets and expenses increase with a debit, on the left side of the entry. So do owner draws and other contra-equity accounts, which behave like expenses. Liabilities, equity, and revenue decrease with a debit. A debit to Cash makes it bigger; a debit to Accounts payable makes the debt smaller.

Is a credit good or bad in bookkeeping?

Neither. Credit means only 'the right side of the account.' A credit to Sales revenue is good news; a credit to Cash means money left. The banking usage — where a 'credit' on your statement is money in — is written from the bank's perspective, because your deposit is the bank's liability.

Do I need the DEALER mnemonic to remember debits and credits?

No, and it is worth retiring. Mnemonics like DEALER recall the table but hide the logic. Derive it instead: assets sit left of the accounting equation and grow on the left (debit); liabilities and equity sit right and grow on the right (credit); revenue behaves like equity, expenses like anti-equity.