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# Debit Balance

Updated on January 3, 2024
Article byWallstreetmojo Team
Edited byAshish Kumar Srivastav
Reviewed byDheeraj Vaidya, CFA, FRM

## What is Debit Balance?

A debit balance is an amount that 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. At the same time, 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, , 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 .

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

Cash A/c

Here 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 a credit of Rs. 360,000.

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 balances along with their difference from a credit balance. You can learn more about financing from the following articles –