A debit is an entry on the left side of an account. A credit is an entry on the right. That is genuinely all they mean — they are directions, not good or bad, not in or out.
Almost everyone gets stuck here for the same reason, so it is worth naming it directly.
Why your bank statement confused you
Your bank says your account was "credited" when money arrives. So credit must mean money in, right?
That statement is written from the bank's point of view, not yours. Your deposit is money the bank owes you — a liability on their books — and liabilities increase with credits. From your side, the same event is a debit: your asset went up.
Both are correct. They are two different sets of books describing one event. Once you see that, the confusion usually stops for good.
The table that settles every case
Each account type has a natural side — the direction that makes it grow:
| Account type | Increases with | Decreases with | Examples |
|---|---|---|---|
| Asset | Debit | Credit | Bank, Inventory, money a marketplace owes you |
| Expense | Debit | Credit | Marketplace fees, shipping supplies, software |
| Liability | Credit | Debit | Credit card, sales tax payable, money you owe vendors |
| Equity | Credit | Debit | Owner's investment, retained earnings |
| Income | Credit | Debit | Sales |
There is a shortcut worth memorizing: assets and expenses are debit-natured; everything else is credit-natured.
Why it splits that way
Because of the accounting equation — Assets = Liabilities + Equity. Assets sit on the left of that equation, so they grow on the left. Liabilities and equity sit on the right, so they grow on the right. Income and expenses are just equity in motion: income eventually increases what the owners have, expenses reduce it, so they inherit the same sides.
It is not arbitrary. It falls out of the equation.
Contra accounts: the useful exception
Some accounts deliberately sit on the opposite side from their type. Refunds is the one you will meet: it is an Income-type account, but it holds debits, because a refund reduces revenue.
The alternative would be to quietly subtract refunds from sales and show one net number. Keeping refunds as their own contra account means you can see gross sales and refunds separately — and a refund rate climbing against flat sales is something you want to see, not something to average away.
The only rule you have to remember
Every transaction has equal debits and credits. If you are recording something by hand and the two sides do not match, the entry is wrong — and SalesImporter will refuse it rather than write books that do not balance.
You do not need to be fast at this. You need to know that both sides exist, and why the system insists on them.