There are two types of accounts under double-entry accounting
i.) Debit accounts: These include assets and expenses. Whereas a firm buys an asset or incurs an expense, it does a debit entry to give the impact of enhancing these accounts.
ii.) Credit accounts: They are liabilities, equity, and revenue. A firm incurs a liability or earns some revenue hence records a credit entry in these accounts.

There are two types of accounts under double-entry accounting
i.) Debit accounts: These include assets and expenses. Whereas a firm buys an asset or incurs an expense, it does a debit entry to give the impact of enhancing these accounts.
ii.) Credit accounts: They are liabilities, equity, and revenue. A firm incurs a liability or earns some revenue hence records a credit entry in these accounts.
There has to be an equal and offsetting credit entry for every debit entry. Such a balance will make sure that the accounting equation remains intact, meaning that financial statements will remain correct.
Let us look at a few simple examples about how double-entry accounting works:

There are two types of accounts under double-entry accounting
i.) Debit accounts: These include assets and expenses. Whereas a firm buys an asset or incurs an expense, it does a debit entry to give the impact of enhancing these accounts.
ii.) Credit accounts: They are liabilities, equity, and revenue. A firm incurs a liability or earns some revenue hence records a credit entry in these accounts.
There has to be an equal and offsetting credit entry for every debit entry. Such a balance will make sure that the accounting equation remains intact, meaning that financial statements will remain correct.
Let us look at a few simple examples about how double-entry accounting works: