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Chapter 16. Making Journal Entries > Balancing Debit and Credit Amounts
16.1. Balancing Debit and Credit Amounts
In double-entry accounting, both sides of any transaction have to balance, as the transaction in Figure 16-1 shows. When you move money between accounts, you increase the balance in one account and decrease the balance in the other—just as shaking some money out of your piggy bank decreases your savings balance and increases the money in your pocket. These changes in value are called debits and credits. If you commit anything about accounting to memory, it should be the definitions of debit and credit, because these are the key to successful journal entries, accurate financial reports, and understanding what your accountant is talking about.
Figure 16-1. For each transaction, the total in the Debit column has to equal the total in the Credit column. To transfer money from one income account to another, you debit the original account (decrease its balance) and credit the new account (increase its balance).
