The debits are credits and the credits are debits

The Curious Case of Debits and Credits: A Simple Guide to Accounting Basics

Understanding the fundamental concepts of debits and credits can often be a source of confusion, even for those who might be well-versed in other areas of finance. It’s a common misstep to mix these terms up, and the frustration can be palpable.

At its core, the Accounting system relies on a double-entry framework: every transaction affects at least two accounts, maintaining a balance within the books. But if you find yourself mixing up debits and credits, you’re not alone—many people face this challenge.

In simple terms, debits (often noted on the left side of an account) can increase assets or expenses and decrease liabilities or equity. Conversely, credits (found on the right side) do the opposite: they increase liabilities or equity and decrease assets or expenses.

This can definitely feel like a mind-bending puzzle at times. However, with practice and an understanding of how these elements function, the confusion can gradually dissipate. Remember, Accounting is not just about numbers; it’s about holding the integrity of financial information in check.

If you’re grappling with understanding debits and credits, take a deep breath. With a bit of patience and dedication, you’ll find that these terms will start to make sense. Happy accounting!