when buying on margin investors borrow funds from their brokerage and then combine those funds with their own to purchase a greater number of shares than they would have been able to purchase with their own funds the debit amount recorded by the brokerage in an investor s account represents the cash cost of the transaction to the investor 
the debit balance in a margin account is the amount of money owed by the customer to the broker or another lender for funds advanced to purchase securities the debit balance is the amount of funds that the customer must put into their margin account following the successful execution of a security purchase order to properly settle the transaction the debit balance can be contrasted with the credit balance while a long margin position has a debit balance a margin account with only short positions will show a credit balance the credit balance is the sum of the proceeds from a short sale and the required margin amount under regulation t sometimes a trader s margin account has both long and short margin positions adjusted debit balance is the amount in a margin account that is owed to the brokerage firm minus profits on short sales and balances in a special miscellaneous account sma contra accountscertain accounts are used for valuation purposes and are displayed on the financial statements opposite the normal balances these accounts are called contra accounts the debit entry to a contra account has the opposite effect as it would to a normal account for example an allowance for uncollectable accounts offsets the asset accounts receivable because the allowance is a negative asset a debit actually decreases the allowance a contra asset s debit is the opposite of a normal account s debit which increases the asset 