An accounting entry that results in a decrease or increase in assets on a balance sheet is called a debit. In basic accounting, debits are balanced by credits, which work the opposite way.

A debit entry is one that records a payment owed or made. Debit entries are normally made on the left side of a ledger account. In a double-entry bookkeeping system, a transaction debits one account and credits another. By debiting an account, the asset balance is increased or the liability balance is decreased.

As a rule, an expense, asset addition, or decrease in revenue, or liability is referred to as a debit.

Debits are a feature of all double-entry accounting systems. The debits are listed on top of a standard journal entry, while the credits are listed below the debits. In T-accounts, a debit is on the left and a credit is on the right.

To ensure that all entries balance, debits and credits are utilized in the trial balance and adjusted trial balance. In other words, the total dollar amount of all debits must equal the total dollar amount of all credits. Hence, finances must be balanced.