[cathys]

The debit and credit system is simply a balancing act.
Assets and expenses are debits. Liabilities and equity are credits.
Obviously the converse will then also be true:
– a debit can reduce an asset; and
– a credit can reduce a liability.
If you pay 100 for something it is removed from your bank account. (reducing an asset: a credit). You then need to ask whether you have ‘wasted’ your money or not (do you have future value in what you have just bought or is it something that will not last):
– if you have ‘wasted’ your money, you debit an expense
– if there is future value in what you have bought, you debit an asset.

A very crude explanation but hope it helps.

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