Debit meaning: when money leaves an account

Debit meaning in banking and in bookkeeping

What does debit mean? The answer depends on who is speaking, so here are both senses.

1. Banking sense. A debit is any amount that leaves your account: a card payment, a bill paid by auto pay, a cash withdrawal or a bank fee. Your statement lists it in a debit column, and your balance goes down.
2. Accounting sense. In double entry bookkeeping, a debit is an entry recorded on the left side of an account. Whether it raises or lowers that account depends on what kind of account it is.

There is also a loose, figurative use. People sometimes say a mistake was "a debit" against someone's reputation, meaning a point against them. This is less common than the money senses. To define debit in one line: it is the side of a record that shows money going out of your account, or onto the left side of a ledger.

Debit definition in accounting

Bookkeepers keep two sides for each account. The left is the debit side and the right is the credit side. A simple rule many students learn:

So when a shop buys a new oven for cash, it debits the equipment account (an asset goes up) and credits the cash account (another asset goes down). The two entries always match in total, which is why the books balance.

Debit vs credit at a glance

The two words are a pair, and our page on credit covers the other half in detail. The confusing part is that your bank and your accountant look at the same money from opposite sides.

• Your view: a debit on your statement means your money went out. A credit means money came in, such as a salary or a refund.
• The bank's view: your savings are money the bank owes you, a liability on its books. When you deposit cash, the bank credits your account because its debt to you grows.

A debit card takes money straight from your own balance. A credit card spends the bank's money first, and you repay it later, often with interest if you are late.

Debit in sentences

• The gym membership is debited from my account on the first of every month.
• I saw a debit of 299 on my statement and could not remember what it was for.
• Record the purchase as a debit to supplies and a credit to cash.
• Her pension is credited on Friday, and the rent debit goes out on Monday.
• The bank reversed the duplicate debit after he called the helpline.

Common terms that use the word

• Debit card: a payment card linked to your bank account.
• Direct debit: permission for a company to take regular payments from your account (common in the UK); in India a similar setup is often called an auto debit or mandate, and in the US, autopay or ACH debit.
• Debit note: a document a buyer sends to a seller, for example after returning goods, asking for the amount to be adjusted.
• Debit balance: when the debit side of an account is larger than the credit side.

Our business and money section gathers related terms, including budget, revenue and collateral.

Mix-ups to avoid

Debit and debt grew from one Latin root, yet they mean different things. A debt is money you owe someone. A debit is an entry or a deduction. Paying off a debt usually creates a debit in your bank account.

Spelling: it is debit, with one t, and debited, with one t. Writing "debbit" or "debitted" is a mistake.

Debit does not mean loss. In bookkeeping, buying a building is a debit, yet the business has not lost anything; it has swapped cash for property.