Debit

(DR).

1.

In relation to a bank account, a debit balance is one which stands in favour of the bank.

The customer owes money to the bank.

Also known as an overdrawn balance.

(Contrasted with a credit, or positive, balance.)

2.

An item drawn out of an account, or charged against the account.

3.

In double entry book-keeping, every accounting transaction is recorded with both a Debit entry and a Credit entry in the accounting records.

Debit balances represent assets or expenses (while Credits represent liabilities, capital or income).

4.

In double entry book-keeping a Debit entry is one made:

• To increase a debit balance; or

• To reduce a credit balance.

For example, the book-keeping entry to recognise a cash sale is:

DR Bank

CR Income

If the bank balance is already an asset (DR balance in the account holder's records), the DR Bank accounting entry for the receipt will increase the positive bank balance (asset) in the balance sheet.

But if the bank balance is currently overdrawn, then the DR Bank accounting entry for the receipt will reduce the overdrawn bank balance (liability) in the balance sheet.

5.

UK tax loan relationship rules.

Any expense, cost, loss or deficit, for example interest payable, arising from a loan relationship.

See also

• Accruals basis
• Bookkeeping
• Credit
• Debit balance
• Debit card
• Direct debit
• Double entry
• Loan relationship
• Net credit/debit position
• Overdraft
• Overdrawn