Financial Accounting · Trial balance

Debit and Credit Balances of Ledger Accounts Explained

Updated 11 October 2026 · Fact-checked

To balance off a ledger account, total both sides, find the difference, and write it on the smaller side as the balance carried down. Assets and expenses normally have debit balances. Liabilities, equity and income normally have credit balances. The trial balance lists each balance on its natural side.

Understand Debit and Credit Balances of Ledger Accounts

Every transaction is recorded twice in the ledger: one debit and one credit of equal value. Over time each ledger account collects debits on its left side and credits on its right side. At the period end you need one figure for each account. That figure is the balance.

The balance is the difference between total debits and total credits. If debits are bigger, the account has a debit balance. If credits are bigger, it has a credit balance. The side of the balance tells you what the account is.

You can remember the normal sides from the accounting equation: Assets = Liabilities + Equity. Assets and expenses sit on the debit side, because an increase is a debit. Liabilities, equity and income sit on the credit side, because an increase is a credit. Drawings reduce equity, so they have a debit balance.

The trial balance lists every ledger balance in two columns. If you have posted every double entry correctly, total debit balances equal total credit balances. Some accounts can show an unusual side, such as a bank overdraft (credit on a bank account) or a customer who has overpaid (credit in receivables).

Key formulas to remember

Accounting equation: Assets = Liabilities + Equity; Assets are normally debit balances. Liabilities and equity are normally credit balances.
Balance of an account: Balance = Total of larger side − Total of smaller side; The balance is written on the smaller side as 'balance carried down' (c/d).
Normal debit balances: Assets, Expenses, Drawings, Purchases, Receivables, Inventory (opening inventory in the trial balance); An increase is a debit. Remember: DEAD (Drawings, Expenses, Assets = Debit).
Normal credit balances: Liabilities, Equity (capital, reserves), Income, Payables, Loans; An increase is a credit. Remember: liabilities, equity and income are credits.
Trial balance check: Total debit balances = Total credit balances; Equality does not prove the ledger is free from error.

How to solve Debit and Credit Balances of Ledger Accounts questions

Use this method for any question that asks you to balance an account or place a balance in the trial balance.

1Total the debit side and the credit side of the account, without writing the totals yet.
2Subtract the smaller total from the larger total to find the balance.
3Write the balance on the smaller side as 'balance carried down' so both sides now equal the larger total.
4Write the same total on both sides at the same level, then bring the balance down on the opposite side as 'balance brought down' (b/d).
5The side of the balance brought down is the side of the balance. Debit b/d means a debit balance. Credit b/d means a credit balance.
6Copy the balance to the trial balance in the matching column.
7Cross-check the side against the type of account. If it looks odd, such as a credit balance on an asset, check the entries or explain it, for example an overdraft.

Quickest way: Classify first, then calculate

When to use it: Use this in objective tests when you must say whether a balance is a debit or a credit without drawing the account.

Identify the account type: asset, expense, liability, equity or income.
Assign the normal side: asset and expense debit, the rest credit.
Add the amounts on the normal side and subtract those on the opposite side, in your head or on the notepad.
If the result is negative, the balance is on the opposite side. Flag it as an unusual balance.
For multiple choice, remove the options with the wrong side first, then check the amount.

Common mistakes in Debit and Credit Balances of Ledger Accounts

Putting the balance carried down on the larger side.
Students think the balance should go where the bigger total is.
Fix: Write c/d on the smaller side so that both sides total the same. Bring the balance down (b/d) on the opposite side, which is the side that was larger.
Treating the b/d side as the opposite of the account's balance.
Confusion between c/d and b/d positions.
Fix: The b/d is the balance. If b/d is on the debit side, the balance is a debit.
Putting drawings or sales returns in the wrong column.
Students link 'drawings' with equity, which is normally a credit, and forget that drawings reduce equity. They also forget that sales returns reduce income.
Fix: Drawings reduce equity, so they are debits. Sales returns reduce income, so they are debits. Neither is a contra asset. Purchase returns are credits.
Listing a bank overdraft as a debit.
Bank is usually an asset, so students assume a debit.
Fix: Check which side is bigger. If credits exceed debits, the bank account has a credit balance, which is an overdraft liability.
Entering the trial balance with the wrong sign for allowance for receivables or accumulated depreciation.
These look like assets but they are contra asset accounts that reduce assets.
Fix: Both are credit balances. They are deducted from the related asset.
Assuming equal totals prove the ledger is right.
A balanced trial balance feels like confirmation.
Fix: Errors such as omission or wrong account can leave totals equal. Treat equality as a check only.

Worked examples

Example 1

The cash at bank account for the month shows: debits of opening balance $4,000, receipts $9,500 and $2,500; credits of payments $7,200 and $3,800. Balance off the account and state the side of the balance.

Show the solution

Total debits: 4,000 + 9,500 + 2,500 = $16,000.
Total credits: 7,200 + 3,800 = $11,000.
Difference: 16,000 − 11,000 = $5,000.
Credits are smaller, so write 'balance c/d $5,000' on the credit side. Both sides now total $16,000.
Bring down $5,000 as 'balance b/d' on the debit side.

Answer: The balance is $5,000 debit. It is a positive bank balance (an asset).

Example 2

At the year end the ledger shows these balances: Sales $80,000; Purchases $45,000; Drawings $6,000; Payables $9,000; Receivables $12,000; Capital $20,000; Rent expense $4,000. Which accounts are debit balances, and what is the total of the debit column?

Show the solution

Purchases is an expense: debit $45,000.
Drawings reduce equity: debit $6,000.
Receivables is an asset: debit $12,000.
Rent expense: debit $4,000.
Sales, payables and capital are credits: 80,000 + 9,000 + 20,000 = $109,000.
Debits: 45,000 + 6,000 + 12,000 + 4,000 = $67,000.
The list given is only a partial trial balance, so the debits ($67,000) and the credits ($109,000) do not agree. The question only asks for the debit column.

Answer: Debit balances are purchases, drawings, receivables and rent expense, totalling $67,000.

Exam tips

Learn the normal side of every account type. Most objective test questions ask about this directly.
Watch for contra asset accounts. Accumulated depreciation and allowance for receivables are credit balances deducted from assets. Also remember that drawings and sales returns are debit balances, because they reduce equity and income.
In number entry questions, work out the balance on your notepad and check the side before typing.
In multiple response questions, read how many items to select and test each against its normal side.
If the question gives a trial balance with a missing figure, add the known debits and credits and the difference is the missing balance on the smaller side.

Practice questions from Trial balance

Debit and Credit Balances of Ledger Accounts in other exams

The same ground in other exams, if you are preparing for more than one or want another angle on it.

Debit and Credit Balances of Ledger Accounts: frequently asked questions

Which accounts have debit balances and which have credit balances?

Assets, expenses and drawings normally have debit balances. Liabilities, equity and income normally have credit balances. A balance can be on the opposite side in special cases, such as a bank overdraft.

How do I balance off a ledger account?

Total both sides, find the difference and write it on the smaller side as balance carried down. Show equal totals on both sides. Then bring the balance down on the opposite side as balance brought down.

Is a debit balance always good news?

No. Debit and credit are only sides of the ledger. A debit balance on an asset is normal, but a debit balance on an expense is simply a cost. What matters is the type of account.

Why is accumulated depreciation a credit balance?

It is a deduction from non-current assets at cost. The credit entry made when depreciation is charged builds up in this account, and it is subtracted from the asset's cost.