If you're new to QuickBooks, understanding how debits and credits work can be confusing. Sometimes, debiting an account increases its balance; other times, it decreases it—and the same applies to credits. This can be especially tricky because most of us associate debits with reducing an account balance and credits with increasing it, based on how banks typically use these terms.

To make it easier, try to set aside what you’ve learned about debits and credits in the past. Approaching this concept with a fresh perspective can make it easier.

QuickBooks is a double-entry accounting system. Double-entry systems are based on T-accounts. A T-account is just what it sounds like—an account that looks like a "T." A T-account will have the name of the account, with the left column always representing debits and the right column always representing credits. That’s the first new piece of information to remember: left column = debits, and right column = credits.

Some accounts typically carry a debit balance, meaning their debits are greater than their credits. Others carry a credit balance, where credits are greater than debits.

Accounts with a normal debit balance include Dividends, Expenses, and Assets. For these accounts, debits increase the account’s value, while credits decrease it.
Conversely, accounts with a normal credit balance are Liabilities, Equity, and Revenue (aka income). For these accounts, debits decrease the account’s value, and credits increase it.

An easy way to remember this is by using the acronym D.E.A.L.E.R. In a T-account, debits are always on the left side. In D.E.A.L.E.R., D, E, and A (for Dividends, Expenses, and Assets) are on the left, representing accounts with debit balances. L, E, and R (for Liabilities, Equity, and Revenue) are on the right, representing accounts with credit balances. Debit-balance accounts increase when debited, and credit-balance accounts increase when credited. Simple!

So, whenever you're unsure, remember: D.E.A.L.E.R. helps clarify which side of the entry will increase each type of account. Keep practicing, and debit and credit will start to be second nature!