Write down a Journal entry page. Label two columns, one for Debit and one for Credit. Think of an event like buying $250 of supplies using cash. You don’t have to fill in a number yet. Just say what happened. We got more supplies, we lost some cash. The two involved accounts are both asset accounts but one went up and the other went down. We debit supplies for $250 and credit cash for $250.
How do I know? Because debit and credit are neither “up” nor “down.” Those words have different meanings depending on the account type. For asset accounts, debit means up and credit means down. For liability and equity accounts, debit means down and credit means up. For revenue accounts, debit means down and credit means up. And for expense accounts, debit means up and credit means down. It’s easier if you think of debit and credit within the context of the accounting equation.
Say you take out a $500 loan and deposit the cash. Your cash balance goes up so you debit cash. You also owe more so you credit loans payable. Does the entry make sense? The numbers add up, but $500 isn’t revenue. That matters because cash from a loan is different from cash from a sale.
What if instead you sell services for $500 and receive cash? You still debit cash because your cash went up, but instead of crediting loans payable, you credit service revenue. Everything is exactly the same except the second account because the reason the cash went up was different. That’s why identifying the accounts comes first.
I see mistakes made all the time where people reverse their debit and credit. They know that cash is “usually a debit” but forget whether cash went up or down. If you pay a $120 electricity bill, your cash goes down so you credit cash. Electricity expense goes up so you debit electricity expense. My suggestion is that you identify the account, determine whether it went up or down, and then decide which side to put it.
I also recommend posting the entry to the general ledger. The debits and credits will add up to the same amount even if you misclassified an account. For instance, a loan entry would balance out in the journal and trial balance even if it was recorded as revenue. Make sure you have supporting documentation like invoices, receipts, bank statements, etc., so you can cross-check your classification as well as the math.
If you’re unsure about a transaction, don’t guess which side to use based on memory. Revisit the transaction and figure out what happened. Did the company receive something? Use something? Borrow something? Earn something? Spend something? That will tell you the accounts and those will tell you which side to use. Memorization helps, but it shouldn’t be your primary tool.