How to Keep Your Debits and Credits Straight with QuickBooks 2009

By Stephen L. Nelson

Part of QuickBooks 2009 For Dummies Cheat Sheet

In any accounting system, including QuickBooks, the natural balance for asset accounts is on the left (debit), and the natural balance for liability and owner’s equity accounts is on the right (credit). The exceptions are contra accounts and expense accounts that add or deduct from other accounts to form a net amount. The following table lists common accounts and what you put in their debit and credit columns.

Account Type Debits Credits
Assets Increase asset accounts Decrease asset accounts
Liabilities Decrease liability accounts Increase liability accounts
Owner’s equity Decrease owner’s equity accounts Increase owner’s equity accounts
Income Decrease income accounts Increase income accounts
Expenses Increase expense accounts Decrease expense accounts