An accounting term that comes from the Latin word “debere”, which means “to owe”. Debit is a journal entry that records a decrease in the value of, or subtraction from, an entity’s assets, or an increase in the value of, or addition to, a liability.

In other words, it reflects the accounting entries in an entity’s balance sheet (statement of financial position) that represent either an increase in an asset or a decrease in a liability.

Generally speaking, in bookkeeping, a debit is an entry on the left side of a double-entry bookkeeping system that reflects the addition/ or increase of an asset or expense or the removal/ transfer of a liability or a reduction to a liability or revenue.

Debit increases assets, expenses, and losses and decreases liabilities and stockholders’ equity and other items on the liability side of a balance sheet.

Debits and credits are equal but represent opposite entries in its balance sheet in the bookkeeping system.