An accounting entry that increases asset or expense accounts and decreases liability, equity, or revenue accounts. In double-entry bookkeeping, every transaction has equal debits and credits.
Understanding Debit
In double-entry bookkeeping, a debit is an entry on the left side of an account ledger. Debits increase asset accounts (like cash, inventory, and equipment) and expense accounts (like rent, advertising, and fees). Conversely, debits decrease liability accounts, equity accounts, and revenue accounts.
Every financial transaction requires at least one debit and one credit entry, and the total debits must always equal the total credits. This balancing mechanism is the core principle that keeps the accounting equation (Assets = Liabilities + Equity) in balance at all times.
The term "debit" comes from the Latin word "debere," meaning "to owe." Despite its association with bank debit cards (which reduce your bank balance), in accounting a debit to your cash account actually increases your cash balance — because cash is an asset account.
Why It Matters for Ecommerce
Understanding debits is fundamental to reading and creating journal entries in QuickBooks or any accounting system. When you import ecommerce transactions, each one must be properly classified with debits and credits. Misclassifying a debit as a credit (or vice versa) creates imbalances that cascade through your financial statements.
Practical Example
When you purchase $500 of inventory with cash: Debit Inventory $500 (asset increases), Credit Cash $500 (asset decreases). When you sell that inventory for $800: Debit Cash $800 (asset increases), Credit Sales Revenue $800 (revenue increases). Debit COGS $500 (expense increases), Credit Inventory $500 (asset decreases).
Related Terms
Credit
An accounting entry that increases liability, equity, or revenue accounts and decreases asset or expense accounts. Always paired with an equal debit in double-entry bookkeeping.
AccountingDouble-Entry Bookkeeping
An accounting system where every financial transaction is recorded in at least two accounts — a debit and a credit — ensuring the accounting equation always balances.
AccountingJournal Entry
A record of a financial transaction in the accounting system, containing the date, accounts affected, amounts, and a description. The fundamental building block of double-entry bookkeeping.
Put This Knowledge Into Practice
Now that you understand debit, use PrimeConnect's free accounting tools to convert your ecommerce data into QuickBooks-ready formats — 100% browser-based.
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