Blog 3 – 9th September 2026 – Rules of debit and credit

Debit and credit are the two sides of an account. Debit is the left side, and credit is the right side. In the double-entry system, every transaction is recorded with equal total debits and credits.

Traditional rule	Modern rule
Personal accounts: Debit the receiver; credit the giver. Real accounts: Debit what comes in; credit what goes out. Nominal accounts: Debit all expenses and losses; credit all incomes and gains.	Assets: Debit increases; credit decreases. Liabilities: Credit increases; debit decreases. Capital: Credit increases; debit decreases. Expenses and losses: Debit increases; credit decreases. Income and gains: Credit increases; debit decreases.

Traditional rule

Modern rule

Personal accounts: Debit the receiver; credit the giver.

Real accounts: Debit what comes in; credit what goes out.

Nominal accounts: Debit all expenses and losses; credit all incomes and gains.

Assets: Debit increases; credit decreases.

Liabilities: Credit increases; debit decreases.

Capital: Credit increases; debit decreases.

Expenses and losses: Debit increases; credit decreases.

Income and gains: Credit increases; debit decreases.