Debit and credit
Debit and credit are the left and right sides of an account; on an asset account a debit means an increase, on a liability or income account it means a decrease, and in every entry the totals of both sides are equal.
Definition
The terms are historical and misleading: debit does not mean debt, credit does not mean ownership. Whoever has once worked it out across four account types — assets, liabilities, expenses, income — no longer needs mnemonics.
What matters in practice is the equality of the totals: it is the system’s checksum. Accounts whose balance sheet does not balance do not have a rounding error, they have a missing entry.
What the software must be able to do
Programs that hide debit and credit are pleasant for beginners. For year end and for working with the fiduciary, access to the entry level is still needed.
Checked Aug 2026
More terms under Bookkeeping and retention: Accrual principle Accrued liabilities Annual accounts Association accounting Balance sheet Balance sheet total Book value Break-even point Business assets Business expenses Cash book Cash flow statement Cash receipts Contribution margin Cost centre Current assets Depreciation Double-entry bookkeeping Duty to keep accounts EBIT EBITDA Equity Equity ratio Financial year Fixed assets Fixed costs Foreign currency General ledger Gross profit Hidden reserves Income statement Inventory count Journal Journal entry Liabilities Liquidity Loss carry-forward Membership dues Net profit Opening balance sheet Overheads Pass-through item Prepaid expenses Provision Record-keeping ordinance Reserves Retained profit Simple accounts Swiss SME chart of accounts Tamper resistance Turnover Value adjustment Variable costs Volunteer-run structure Voucher Year-end closing modules