AccountingHub
A1

The rule: DEBT and CLOR

The rule, and how to remember it
Debits increase
DEBT

Expenses, Assets, Dividends.

DEBT sounds like debit. It is a hook, not an acronym: the B and T do not expand, so the three accounts always ride beside it.

Credits increase
CLOR

Liabilities, Owner’s equity, Revenue.

C for credits, then every letter decodes. Coverage is complete.

Debits increase expenses, assets, and dividends. Credits increase liabilities, equity, and revenue. Anything that pushes equity up is a credit: revenue, common stock. Anything that pulls it down is a debit: expenses, dividends. Assets are the mirror image.

Prefer letters that decode?

means every transaction touches at least two accounts, and the total always equal the total . Debit just means the left side of an account; credit means the right. Neither means increase or decrease by itself.

Whether a debit raises or lowers a balance depends on the account's . Debits increase expenses, assets, and dividends. Credits increase liabilities, equity, and revenue. A debit to a credit-normal account lowers it, and a credit to a debit-normal account lowers it too.