What do "debit" and "credit" mean?

Debit and Credit

Journal entries, the entries recording the law firm’s business transactions on its books, are made up of at least one debit and one credit.

A [simple_tooltip content=’A debit is an expense, or an amount of money paid from an account, that results in the increase of an asset or a decrease in a liability or owners equity on the balance sheet.’]debit[/simple_tooltip] is the part of the journal entry that increases an [simple_tooltip content=’An asset is any resource owned by the business. Anything tangible or intangible that can be owned or controlled to produce value and that is held by a company to produce positive economic value is an asset.’]asset[/simple_tooltip] or [simple_tooltip content=’An expense is the cost of operations that a company incurs to generate revenue. Common expenses include payments to suppliers, employee wages, factory leases, and equipment depreciation.’]expense[/simple_tooltip] account and decreases a [simple_tooltip content=’Liabilities are defined as a company legal financial debts or obligations that arise during the course of business operations. Liabilities are settled over time through the transfer of economic benefits including money, goods, or services.’]liability[/simple_tooltip] or [simple_tooltip content=’Equity is the difference between the value of the assets and the value of the liabilities of something owned.’]equity[/simple_tooltip] account.^[1] Accounts which increase when debited are found on the left side of the [simple_tooltip content=’A statement of the assets, liabilities, and capital of a business or other organization at a particular point in time, detailing the balance of income and expenditure over the preceding period.’]balance sheet[/simple_tooltip] and the [simple_tooltip content=’A statement of all debits and credits in a double-entry account book, with any disagreement indicating an error.’]trial balance[/simple_tooltip], and include Draws, Expenses, Assets, and Losses.^[2]

A [simple_tooltip content=’The ability of a customer to obtain goods or services before payment, based on the trust that payment will be made in the future.’]credit[/simple_tooltip] is the part of the journal entry that increases a liability or equity account and decreases an asset or expense account.^[1] Accounts which increase when credited are found on the right side of the balance sheet and the trial balance, and include [simple_tooltip content=’A gain is the increase in net profit resulting from something other than the day to day earnings from recurrent operations, and are not associated with investments or withdrawals.’]Gains[/simple_tooltip], [simple_tooltip content=’Income is the consumption and saving opportunity gained by an entity within a specified timeframe, which is generally expressed in monetary terms.’]Income[/simple_tooltip], [simple_tooltip content=’Revenue is the income that a business have from its normal business activities, usually from the sale of goods and services to customers.’]Revenues[/simple_tooltip], Liabilities, and Owner’s Equity.^[2]