# Debit Balance  ## What is Debit Balance?

Debit balance is an amount which states that the total amount of debit entries in a general ledger is more than the total amount of the credit entries.

It is different from debit entry. A entry is made to record a transaction in the general ledger, e.g., when we purchase an asset, we debit the asset account recording the purchase and credit bank account showing an outflow of money. Whereas, a debit balance is a net amount (Debit minus Credit) in a general ledger after recording all the transactions.

### Examples

It is generally found in the assets and expenses ledgers, a few examples are stated below,

1. Fixed assets A/c’s – When a is purchased, it will be recorded as a debit transaction, and later credit entries are made for charging depreciation to the asset. It will leave a net debit balance in the fixed asset account.
2. Expense A/c’s – The expense and loss accounts like rent, salary, repair, and maintenance, interest expense, electricity, etc. will always carry a debit balance.
3. Investments – Similar to fixed assets, investment purchased will have a debit entry, and later debit balance will be reflected in the investment account.

For eg:
Source: Debit Balance (wallstreetmojo.com)

### Debit vs. Credit Balance

In we can find two types of balances. To find out what balance a ledger reflects, we need to calculate which side of the ledger has a higher balance, i.e., if the debit total is greater than the credit, the ledger has a Debit balance. Similarly, if the credit total is higher than the debit total, it will have a .

To understand in a better way, we can consider the following illustration,

Cash A/c

Here as we can see that the debit total is more than the credit total, i.e., the inflow of cash is more than the outflow; therefore, the cash account gives a debit balance of 3,000.

Loan A/c

### Conclusion

Here we can understand that after repayment of the installment of the loan, the credit total is higher than the debit total; therefore, the loan a/c gives credit of Rs. 360,000.

From the above explanation, we can understand that these balances are commonly used terms in accounting, and while reading and , therefore, it is important to understand the meaning of the term which can be concluded simply, i.e.,

if Debit total > Credit Total = Debit Balance and
if Credit total > Debit Total = Credit Balance.

This article has been a guide to what debit balance is and its definition. Here we discuss examples of debit balance along with its difference with a credit balance. You can learn more about financing from the following articles –