Debits and Credits Explained: The DEALER Shortcut

Debits and credits trip up almost every first-year accounting student — usually because they’re taught as “left and right” instead of as a direction system. Here’s the shortcut that makes them click.

Forget left and right — think DEALER

Every account is one of six types. The mnemonic DEALER tells you which side increases each one:

• Dividends — increase with a debit
• Expenses — increase with a debit
• Assets — increase with a debit
• Liabilities — increase with a credit
• Equity — increase with a credit
• Revenue — increase with a credit

The first three (DEA) go up with debits; the last three (LER) go up with credits. To decrease any account, you do the opposite.

A quick example

You buy $500 of supplies with cash. Supplies (an asset) goes up — debit $500. Cash (an asset) goes down — credit $500. Two assets, one up and one down, and the entry balances.

Master this one table and journal entries stop being guesswork. To work through your own course’s examples one-on-one, book a session.