Which accounts will be increased with a credit entry?
Isabella Turner
Updated on February 10, 2026
A credit is always positioned on the right side of an entry. It increases liability, revenue or equity accounts and decreases asset or expense accounts.
What are credit entries?
A credit entry is used to decrease the value of an asset or increase the value of a liability. In other words, any benefit giving aspect or outgoing aspect has to be credited in books of accounts. The credits are entered in the right side of the ledger accounts.
What will a credit entry in at account do?
T- Account Recording The debit entry of an asset account translates to an increase to the account, while the right side of the asset T-account represents a decrease to the account. This means that a business that receives cash, for example, will debit the asset account, but will credit the account if it pays out cash.
What kind of accounts are affected by debits and credits?
The types of accounts to which this rule applies are expenses, assets, and dividends. All accounts that normally contain a credit balance will increase in amount when a credit (right column) is added to them, and reduced when a debit (left column) is added to them.
Where is the credit entry on a ledger?
A credit entry is posted on the right side of a ledger account and is abbreviated as ‘Cr’. This is known as double-entry accounting. There is a lot of confusion when bookkeepers are trying to decide whether a journal entry should be entered on the debit side or credit side.
Which is an example of a credit transaction?
Examples. Cash transactions can include over the counter sale of goods, retail purchases etc. Credit transactions include accrual of utility bills which can be paid subsequently, sale and purchase of goods on credit basis etc. Cash transaction versus credit transaction – tabular comparison.
What happens at the time of a credit transaction?
Credit transactions result in creation of asset (receivable) or liability (payable) in the books of accounts. This asset or liability is extinguished from the books at the time of settlement.
