Is Cash a Debit or Credit?

Q:

Is cash a debit or credit in accounting?

A:

Cash is an asset. Assets have a normal balance of a debit. This means that cash will increase with a debit and decrease with a credit.

An example of a journal entry that would be created from a company receiving cash of $1,000 from a sale would be as follows. Notice that cash is a debit because it is increasing.

AccountDebitCredit
Cash1,000
Revenue1,000

 
When a company pays out cash, the journal entry would reflect a credit for cash because cash is decreasing. For example, assume that a company buys $500 of supplies with $500 cash. The journal entry would be:

AccountDebitCredit
Supplies500
Cash500

 
Keep in mind that a debit does not always increase an account and a credit does not always reduce an account. It depends on the normal balance of the type of account. The below table reflects the normal balances of each listed account.

AccountNormal BalanceIncreases WithDecreases With
AssetsDebitDebitCredit
LiabilitiesCreditCreditDebit
ExpenseDebitDebitCredit
RevenueCreditCreditDebit
Owner's EquityCreditCreditDebit
DividendsDebitDebitCredit
Retained EarningCreditCreditDebit