what is the difference between a debit and a credit 
a debit is a feature found in all double entry accounting systems debits are the opposite of credits in a standard journal entry all debits are placed as the top lines while all credits are listed on the line below debits when using t accounts a debit is on the left side of the chart while a credit is on the right side debits and credits are utilized in the trial balance and adjusted trial balance to ensure that all entries balance the total dollar amount of all debits must equal the total dollar amount of all credits in other words finances must balance a dangling debit is a debit balance with no offsetting credit balance that would allow it to be written off it occurs in financial accounting and reflects discrepancies in a company s balance sheet as well as when a company purchases goodwill or services to create a debit for example if barnes noble sold 20 000 worth of books it would debit its cash account 20 000 and credit its books or inventory account 20 000 this double entry system shows that the company now has 20 000 more in cash and a corresponding 20 000 less in books normal accounting balancescertain types of accounts have natural balances in financial accounting systems assets and expenses have natural debit balances this means that positive values for assets and expenses are debited and negative balances are credited for example upon the receipt of 1 000 cash a journal entry would include a debit of 1 000 to the cash account in the balance sheet because cash is increasing if another transaction involves payment of 500 in cash the journal entry would have a credit to the cash account of 500 because cash is being reduced in effect a debit increases an expense account in the income statement and a credit decreases it liabilities revenues and equity accounts have natural credit balances if a debit is applied to any of these accounts the account balance has decreased for example a debit to the accounts payable account in the balance sheet indicates a reduction of a liability the offsetting credit is most likely a credit to cash because the reduction of a liability means that the debt is being paid and cash is an outflow for the revenue accounts in the income statement debit entries decrease the account while a credit points to an increase in the account the concept of debits and offsetting credits are the cornerstone of double entry accounting debit notesdebit notes are a form of proof that one business has created a legitimate debit entry in the course of dealing with another business b2b this might occur when a purchaser returns materials to a supplier and needs to validate the reimbursed amount in this case the purchaser issues a debit note reflecting the accounting transaction a business might issue a debit note in response to a received credit note mistakes often interest charges and fees in a sales purchase or loan invoice might prompt a firm to issue a debit note to help correct the error a debit note or debit receipt is very similar to an invoice the main difference is that invoices always show a sale whereas debit notes and debit receipts reflect adjustments or returns on transactions that have already taken place margin debit