Is Revenue a Credit balance or a Debit balance?
There IS another way to help you memorize this. It’s based on the equation: Assets = Liabilities + Equity. Assets are on the left and therefore are debits. Liabilities and Owner’s Equity are on the right and therefore are credits. Whichever side they are on is the side you INCREASE on. i.e. if you want to increase an asset (like cash) then you debit cause it’s on the debit side. If you charge something and want to increase liabilities, that’s a credit cause it’s on the credit side. Whenever you want to DECREASE a balance, just do the opposite. Revenues increase equity and are therefore credit accounts, like equity is. Expenses decrease equity and therefore must be the other side, debits. Summary: Assets +debit, -credit Liabilites -debit, + credit Equity -debit, +credit Revenue -debit, +credit Expense +debit, – credit Notice the two “outside” ones (assets & expenses) are the debits. The three inside ones are the credits. Something important to keep in mind: do not think about the “affec
