Is an asset account a debit or credit?
Matthew Harrington
Updated on January 27, 2026
Debits and credits chart
| Debit | Credit |
|---|---|
| Increases an asset account | Decreases an asset account |
| Increases an expense account | Decreases an expense account |
| Decreases a liability account | Increases a liability account |
| Decreases an equity account | Increases an equity account |
What type of account is an asset?
Account Types
| Account | Type | Debit |
|---|---|---|
| BUILDING | Asset | Increase |
| CAPITAL STOCK | Equity | Decrease |
| CASH | Asset | Increase |
| CASH OVER | Revenue | Decrease |
Is a debit card an asset?
Debit Card Debit cards operate much like credit cards but, while credit cards are essentially short term loans, debit cards are more like electronic checks. They are also called check cards, bank cards or, less commonly, asset cards.
Is balance sheet a debit or credit?
To increase the balance of an asset, we debit that account. Therefore the revenue equal to that increase in cash must be shown as a credit on the income statement. The bottom line on the income statement is net income, which interacts with the balance sheet’s retained earnings account within shareholders’ equity.
Which side of the balance sheet is debit?
left side
When using T-accounts, a debit is the left side of the chart while a credit is the right side. Debits and credits are utilized in the trial balance and adjusted trial balance to ensure all entries balance. The total dollar amount of all debits must equal the total dollar amount of all credits.
How are debits and credits different in asset based accounts?
With asset-based accounts, debit balances are the traditional ending balance. Any credit ending balance shifts the asset to liability status. With asset based accounts, debits increase the balance and credits decrease the balance. Naturally debits are preferred especially for the cash accounts.
Why does an asset have a debit balance?
So, we will have to debit the purchase/increase in the asset. And on the sale of any asset purchased before, you need to credit the asset account. Therefore, in general, the debit side of an asset account will be > than the credit side, resulting into a debit balance.
Which is an example of a credit and debit account?
For instance, a contra asset account has a credit balance and a contra equity account has a debit balance. These accounts are used to reduce normal accounts. For example, accumulated depreciation is a contra asset account that reduces a fixed asset account.
Which is better a debit or a credit?
With asset based accounts, debits increase the balance and credits decrease the balance. Naturally debits are preferred especially for the cash accounts. However, credits are not a bad thing as sometimes credits are a part of entry merely shift a value from one asset account to another.
