Debit and Credit Review

  • Peter Lynch
Initially debits and credits are a difficult concept to grasp. If you look at the expanded accounting equation in reference note 001 you should quickly draw the conclusion that debit = left and credit = right.

This quote (from a book: see figure 1) is helpful because it quickly applies the concept to cash. And cash is king.

If the concept feels abstract at first that’s because it is. This concept simply takes time to digest (mentally, don’t eat it).