When we’re talking about “making an accounting entry” what we mean is a two-sided entry you’re making into your accounts with one side being debit and the other credit. Obviously there can be more than one debit or credit, but each entry must always have its debit and credit side. 

The reason for debits and credits and why there always must be those two is a sheer fact of how accounting works. Generally speaking, if you get something as an asset, you gained something meaning it’s also your income. Asset is something you’re going to keep for a while, but income reflects that you earned something, which is also true in the example where you got an asset. In another case where you bought something you’re also obliged to pay for it meaning you’re taking on a liability. Again, it’s not just getting this something you bought, but it’s also giving something for it. You received services – on one side you’re paying cash for it, but it’s not just that. As it happens, you made an expense and your income statement should show it – two sides again to one entry. In summary, an accounting entry always has two sides simply because you cannot just obtain assets etc., they always mean you’re paying something for them at the same time and so on depending on the transaction. Remember, there’s always another side to each entry.

On the balance sheet with debit you account for an increase in your assets, decrease in your liabilities and on the income statement debits are used to increase (meaning adding) expenses and decrease (meaning reducing) income. With the credit it’s the opposite – on the balance sheet it’s for decreasing assets and increasing liabilities and on the income statement for decreasing expenses and increasing revenue. When starting with your entries, something I strongly suggest is that you write down somewhere how the debits and credits work. For reference, here’s a table summarizing and hopefully helping you to remember it better when starting practicing your own accounting:

So always think what your transaction is about – which accounts should increase and which decrease. If you think about that and take the above table you will get the right debits and credits. Soon enough you’ll start to see the pattern and will remember the debits and credits without coming back to this little help we gave you. Don’t get me wrong, having those little guides isn’t bad, but truth of the matter is that whilst we’ve all used them in the beginning, we soon get a hang of it and you’ll just know it all by hard. Have this table (or by all means, make your own which works for you) by your side and in front of you when you’re making your first entries just to ensure you’re not messing up some basics and you’ve got something that is your own roadmap.

To summarize, always keep in mind that one accounting entry has always two sides and that there’s a defined way debits and credits behave in accounting, one which is brought in the table above and which you’re more than welcome to customize yourself and have in front of you when making your own entries to ensure you’re not accounting the other way around how the transaction should not look like in your accounts.