Legal Definitions - debit

Definition: Debit refers to a sum of money that is owed or due. In bookkeeping, it is an entry made on the left side of a ledger or account, indicating an increase in assets or a decrease in liabilities. It can also refer to an account balance that shows that something is still owed to the account holder.

• When you use your debit card to buy groceries, the money is immediately deducted from your bank account.
• If a company purchases new equipment, they would debit the amount from their cash account and credit the amount to their equipment account.
• If you have a credit card balance of $500, but you make a payment of $200, your remaining balance would be debited as $300.

These examples illustrate how debit is used in different contexts. In the first example, the use of a debit card results in an immediate deduction of funds from the account. In the second example, a company uses a debit entry to record the purchase of new equipment. In the third example, a payment is made towards a credit card balance, resulting in a debit entry for the remaining balance.