Question

Do the terms debit and credit signify increase or decrease or can they signify either?

Answer 1

The term debit and credit, increase or decrease an account depends upon the nature of account. Asset account, expenses account, dividends increase when they are debited and the decrease when they are credited. Liability accounts, equity accounts and revenue accounts increase when they are credited and decrease when they are debited.

In short accounts having normal balance of debit increased by debit and decreased by credit whereas accounts having normal credit balance increase by credit and decrease by debit.