What is a debit in accounting terminology?

In accounting terminology, a debit increases what is owed. This concept is central to double-entry bookkeeping, where every transaction affects at least two accounts. When you debit an account, it typically signifies an increase in assets or expenses or a decrease in liabilities or equity.

For example, when a company purchases supplies on credit, it would debit the Supplies account (an asset), indicating the increase in assets while simultaneously crediting Accounts Payable (a liability), which shows an increase in what the company owes. Hence, the correct understanding of a debit is crucial for accurate financial reporting and analysis, as it helps maintain the balance within the accounting equation (Assets = Liabilities + Equity).

Understanding this definition allows accountants to record transactions accurately and maintain a clear financial picture for stakeholders.