These debit and credit practice questions give you hands-on practice with normal balances, transaction analysis, and journal entries. Each exercise includes an answer and a clear explanation so you can understand not only which account is debited or credited, but why.
The questions start with basic debit and credit rules and gradually become more challenging. You will move from identifying normal balances to analyzing business transactions, recording complete journal entries, and solving a compound entry involving more than two accounts.
For each question, try to work out the answer before reading the solution. A reliable approach is to ask four questions:
- Which accounts are affected?
- What type of account is each one?
- Did each account increase or decrease?
- Does that change require a debit or a credit?
By the end of these exercises, you should be able to analyze common transactions and prepare balanced debit and credit entries with more confidence.
If you need a broader review before practicing, use the Debits and Credits learning hub to review the full topic in order.
Quick Debit and Credit Refresher
A debit is an entry on the left side of an account. A credit is an entry on the right side.
Debit does not automatically mean money coming into a business, and credit does not automatically mean money going out. The correct side depends on the type of account and whether that account is increasing or decreasing.
Use this table as a quick reference:
| Account Type | Increase | Decrease | Normal Balance |
|---|---|---|---|
| Assets | Debit | Credit | Debit |
| Liabilities | Credit | Debit | Credit |
| Owner's Equity | Credit | Debit | Credit |
| Revenue | Credit | Debit | Credit |
| Expenses | Debit | Credit | Debit |
These rules apply to the major account categories. Contra accounts are an exception because they normally carry a balance opposite to the account category they offset.
The Four-Step Method for Debits and Credits
Use the same process whenever you analyze a transaction:
- Identify the accounts affected.
- Classify each account as an asset, liability, owner's equity, revenue, or expense .
- Determine whether each account increased or decreased.
- Apply the debit or credit rule for that account type.
Then perform one final check:
That equality is a basic requirement of double-entry accounting and helps keep the accounting equation in balance:
The U.S. Securities and Exchange Commission uses the same basic relationship when explaining the balance sheet: assets equal liabilities plus equity.
Instead of memorizing hundreds of individual journal entries, learn this process and apply it consistently.
Debit and Credit Practice Questions for Beginners
These beginner exercises focus on one skill at a time: identifying whether an account increase or decrease belongs on the debit or credit side.
Try answering each question before opening the explanation.
Question 1: Cash Increase
A business receives cash from its owner.
Does the increase in Cash require a debit or a credit?
Show answer and explanation
Answer: Debit.
Cash is an asset. Assets increase with debits and decrease with credits.
The key is not simply that cash entered the business. First identify Cash as an asset. Then determine that the asset increased. That increase requires a debit.
Question 2: Accounts Payable Increase
A business buys supplies from a vendor and agrees to pay later.
Does the increase in Accounts Payable require a debit or a credit?
Show answer and explanation
Answer: Credit.
Accounts Payable is a liability. Liabilities normally increase with credits.
Because the business now owes more to the supplier, its Accounts Payable balance increased. The increase is therefore recorded as a credit.
Question 3: Service Revenue Increase
A business earns revenue by providing services to a customer.
Does an increase in Service Revenue require a debit or a credit?
Show answer and explanation
Answer: Credit.
Revenue accounts normally increase with credits.
This does not change based on whether the customer pays immediately or promises to pay later. The payment method affects the other account in the entry, but Service Revenue still increases with a credit.
Question 4: Rent Expense Increase
A business records its monthly rent expense.
Should Rent Expense be debited or credited when it increases?
Show answer and explanation
Answer: Debit.
Rent Expense is an expense account, and expenses normally increase with debits.
Notice that you should not decide the entry only by looking at the related cash payment. Rent Expense and Cash are separate accounts, and each one must be analyzed on its own.
Question 5: Equipment Decrease
A business removes equipment from its books after disposing of it.
Does a decrease in Equipment require a debit or a credit?
Show answer and explanation
Answer: Credit.
Equipment is an asset. Asset increases are recorded as debits, while asset decreases are recorded as credits.
This example shows why identifying the account type is only half the process. You must also determine whether the balance is increasing or decreasing.
Question 6: Notes Payable Decrease
A business repays part of the principal on a loan.
Does the decrease in Notes Payable require a debit or a credit?
Show answer and explanation
Answer: Debit.
Notes Payable is a liability. Liabilities normally increase with credits and decrease with debits.
Because repaying principal reduces the amount the business owes, Notes Payable is debited.
Normal Balance Practice Questions
The following questions test whether you recognize the normal balances of common accounting accounts.
Question 7: Accounts Receivable
What is the normal balance of Accounts Receivable?
Show answer and explanation
Answer: Debit.
Accounts Receivable is an asset. Because assets normally increase with debits, Accounts Receivable normally carries a debit balance.
Question 8: Accounts Payable
What is the normal balance of Accounts Payable?
Show answer and explanation
Answer: Credit.
Accounts Payable is a liability. Liability increases are recorded as credits, so Accounts Payable normally carries a credit balance.
Question 9: Owner's Capital
What is the normal balance of Owner's Capital?
Show answer and explanation
Answer: Credit.
Owner's Capital is part of owner's equity. Owner's equity normally increases with credits, so Owner's Capital normally has a credit balance.
Question 10: Which Account Normally Has a Credit Balance?
Which account normally has a credit balance?
- Cash
- Rent Expense
- Service Revenue
- Supplies
Show answer and explanation
Answer: C. Service Revenue.
Cash and Supplies are assets, so they normally have debit balances. Rent Expense is an expense and also normally has a debit balance.
Service Revenue is a revenue account. Revenue normally increases with credits, giving Service Revenue a normal credit balance.
Debit and Credit Transaction Practice
The remaining exercises use a fictional U.S. small business called Compass Design Studio.
Assume Compass Design Studio is a sole proprietorship so that the owner's equity accounts remain consistent throughout the examples.
Question 11: Owner Investment
The owner invests $10,000 cash in Compass Design Studio.
Which account is debited, and which account is credited?
Show answer and explanation
| Account | Debit | Credit |
|---|---|---|
| Cash | $10,000 | |
| Owner's Capital | $10,000 |
Why: Cash is an asset and increased, so Cash is debited. The owner's investment also increases Owner's Capital, which is an equity account. Equity increases are recorded as credits.
Question 12: Buy Equipment for Cash
Compass Design Studio buys $3,000 of equipment for cash.
What is the journal entry?
Show answer and explanation
| Account | Debit | Credit |
|---|---|---|
| Equipment | $3,000 | |
| Cash | $3,000 |
Equipment is an asset that increased, so Equipment is debited.
Cash is also an asset, but it decreased when the business paid for the equipment. An asset decrease is recorded as a credit.
This is a useful example because both accounts are assets. The debit and credit depend on the direction of the change, not simply the account category.
Question 13: Buy Supplies on Account
Compass Design Studio buys $800 of supplies from a vendor and agrees to pay later.
What is the journal entry?
Show answer and explanation
| Account | Debit | Credit |
|---|---|---|
| Supplies | $800 | |
| Accounts Payable | $800 |
Supplies is an asset and increased, so it is debited.
Accounts Payable is a liability. Because the business now owes the vendor $800, the liability increased and is credited.
There is no Cash entry because no cash was paid at the time of purchase.
Question 14: Earn Cash Revenue
Compass Design Studio provides services to a customer and receives $1,500 immediately.
What is the journal entry?
Show answer and explanation
| Account | Debit | Credit |
|---|---|---|
| Cash | $1,500 | |
| Service Revenue | $1,500 |
Cash increased, so the asset is debited.
Service Revenue increased, so it is credited.
Question 15: Earn Revenue on Account
Compass Design Studio provides $2,000 of services to a customer who will pay next month.
What is the journal entry?
Show answer and explanation
| Account | Debit | Credit |
|---|---|---|
| Accounts Receivable | $2,000 | |
| Service Revenue | $2,000 |
Accounts Receivable is an asset and increased, so it is debited.
Service Revenue increased and is credited.
No cash was received when the service was performed. The customer still owes the business, which is why Accounts Receivable is used.
Question 16: Pay a Supplier
Compass Design Studio pays $500 toward an amount it previously owed a supplier.
What is the journal entry?
Show answer and explanation
| Account | Debit | Credit |
|---|---|---|
| Accounts Payable | $500 | |
| Cash | $500 |
Accounts Payable decreases because the business now owes the supplier less. A decrease in a liability is recorded as a debit.
Cash also decreases. A decrease in an asset is recorded as a credit.
Debit and Credit Journal Entry Practice
The next exercises require you to prepare the complete journal entry rather than identify only one side.
Question 17: Pay Monthly Rent
Compass Design Studio pays $1,200 cash for the current month's office rent.
Show answer and explanation
| Account | Debit | Credit |
|---|---|---|
| Rent Expense | $1,200 | |
| Cash | $1,200 |
Rent Expense increased, so the expense account is debited.
Cash decreased because the business paid the landlord, so Cash is credited.
This entry also illustrates why the phrase “money went out” is not enough to determine the full journal entry. One account increased while another decreased, and each follows its own debit and credit rule.
Question 18: Collect Accounts Receivable
A customer pays $1,000 previously recorded in Accounts Receivable.
Show answer and explanation
| Account | Debit | Credit |
|---|---|---|
| Cash | $1,000 | |
| Accounts Receivable | $1,000 |
Cash increased, so Cash is debited.
Accounts Receivable decreased because the customer now owes the business less. An asset decrease is recorded as a credit.
The revenue was recorded when the service was originally performed. Collecting the receivable only changes one asset into another: Accounts Receivable decreases while Cash increases.
Question 19: Receive a Bank Loan
Compass Design Studio receives $5,000 in cash from a bank loan.
Show answer and explanation
| Account | Debit | Credit |
|---|---|---|
| Cash | $5,000 | |
| Notes Payable | $5,000 |
Cash increased, so Cash is debited.
Notes Payable also increased. Because Notes Payable is a liability, its increase is recorded as a credit.
Important: Borrowed money is not revenue. The business has an obligation to repay the lender, which is why the credit goes to a liability account.
Question 20: Receive Cash Before Providing Services
A customer pays Compass Design Studio $900 today for services that will be provided next month.
Show answer and explanation
| Account | Debit | Credit |
|---|---|---|
| Cash | $900 | |
| Unearned Revenue | $900 |
Cash increased, so it is debited.
The business has not yet earned the $900 because it still owes the customer the promised service. That obligation is recorded as Unearned Revenue, a liability.
When the service is later performed, the business can reduce Unearned Revenue and recognize the appropriate amount of Service Revenue.
Question 21: Pay a Utility Bill
Compass Design Studio pays a $250 electricity bill for the current month.
Show answer and explanation
| Account | Debit | Credit |
|---|---|---|
| Utilities Expense | $250 | |
| Cash | $250 |
Utilities Expense increased, so it is debited.
Cash decreased, so the asset is credited.
Mixed Debit and Credit Practice Questions
These exercises are slightly more challenging because the account names are not always obvious from the transaction.
Question 22: Utility Expense Incurred but Not Yet Paid
Compass Design Studio receives a $400 utility bill for services used this month. The bill will be paid next month.
Show answer and explanation
| Account | Debit | Credit |
|---|---|---|
| Utilities Expense | $400 | |
| Accounts Payable | $400 |
Utilities Expense increased because the utility service was used during the current period, so the expense is debited.
Accounts Payable increased because the business now owes $400 that has not yet been paid. The liability increase is credited.
No Cash account appears because no cash has been paid yet.
Depending on a company's chart of accounts, a business may use a more specific accrued-liability account. For this beginner exercise, Accounts Payable is used.
Question 23: Owner Withdrawal
The owner withdraws $600 cash for personal use.
Show answer and explanation
| Account | Debit | Credit |
|---|---|---|
| Owner's Drawings | $600 | |
| Cash | $600 |
Owner's Drawings increases with a debit. This account represents withdrawals by the owner and reduces owner's equity.
Cash decreased, so Cash is credited.
Important: An owner's personal withdrawal is not a business expense. It is recorded separately from expenses incurred to operate the business.
Question 24: Compound Transaction
Compass Design Studio buys equipment costing $2,000. It pays $500 in cash and agrees to pay the remaining $1,500 later.
Show answer and explanation
| Account | Debit | Credit |
|---|---|---|
| Equipment | $2,000 | |
| Cash | $500 | |
| Accounts Payable | $1,500 |
Equipment increased by $2,000, so it is debited.
Cash decreased by $500, so it is credited.
Accounts Payable increased by $1,500, so it is credited.
Total debits = $2,000
Total credits = $500 + $1,500 = $2,000
A journal entry can contain more than two accounts. What matters is that the total debit amount and total credit amount are equal.
Common Debit and Credit Mistakes
Here are four common errors these exercises are designed to correct.
1. Assuming Debit Always Means Cash Coming In
A debit does not mean “money received.”
For example, Rent Expense increases with a debit even though the related cash payment causes Cash to decrease with a credit.
Always analyze each account separately.
2. Treating Every Cash Receipt as Revenue
Receiving cash does not necessarily mean revenue has been earned.
Cash received from a bank loan increases a liability. Cash received before services are performed creates Unearned Revenue until the business earns the amount.
3. Recording Revenue Twice
When a customer pays Accounts Receivable, the business should not record revenue again.
Revenue was recognized when the service was originally earned. Collection simply:
- increases Cash, and
- decreases Accounts Receivable.
4. Looking at the Account Type but Ignoring the Direction
Knowing that Equipment is an asset is not enough.
If Equipment increases, debit it.
If Equipment decreases, credit it.
Account → Account Type → Increase or Decrease → Debit or Credit
Debit and Credit Rules: Quick Review Before You Check Your Score
Before moving on, make sure you can explain these five rules without looking at the table:
- Assets increase with debits and decrease with credits.
- Expenses increase with debits and decrease with credits.
- Liabilities increase with credits and decrease with debits.
- Owner's equity normally increases with credits and decreases with debits.
- Revenue increases with credits and normally decreases with debits.
Then remember the balancing rule:
If you can explain why these rules apply instead of simply memorizing the words “debit” and “credit,” you are building the reasoning needed for more advanced journal entries.
How Did You Score?
Your score can help you decide whether you are ready for more advanced journal entry practice or should review the basics first.
Count how many of the 24 questions you answered correctly before looking at the answers.
| Correct Answers | Suggested Next Step |
|---|---|
| 22–24 | Strong understanding — move on to more advanced journal entries |
| 18–21 | Good foundation — review the questions you missed |
| 14–17 | Review normal balances and transaction analysis |
| 0–13 | Review the basic debit and credit rules before advancing |
This score is only a self-assessment tool. It is not an academic grade or professional certification result.
More important than the score is whether you can explain why each account was debited or credited.
Frequently Asked Questions About Debit and Credit Practice
How can I practice debits and credits?
Practice debits and credits by solving realistic transactions before looking at the answers. For each transaction, identify the accounts, classify them, determine whether they increased or decreased, and then decide which side receives the debit and which receives the credit.
Afterward, compare your journal entry with the solution and identify the reason for any difference.
What is the easiest way to know whether to debit or credit an account?
Identify the account type first, then determine whether that account increased or decreased.
Assets and expenses normally increase with debits. Liabilities, owner's equity, and revenue normally increase with credits.
This approach is more reliable than memorizing individual journal entries.
Which accounts normally have a debit balance?
Assets and expenses normally have debit balances.
Common examples include:
- Cash
- Accounts Receivable
- Equipment
- Supplies
- Rent Expense
- Utilities Expense
Contra accounts can have a normal balance opposite to the broader account category they offset.
Which accounts normally have a credit balance?
Liabilities, owner's equity, and revenue normally have credit balances.
Examples include:
- Accounts Payable
- Notes Payable
- Owner's Capital
- Service Revenue
- Unearned Revenue
These accounts normally increase with credits, which is why their usual balances appear on the credit side.
Do total debits always have to equal total credits?
Yes. In double-entry accounting, the total debits in a journal entry must equal the total credits.
An entry can contain two accounts or several accounts, but the total dollar amount recorded on each side must remain equal.
Is a debit good and a credit bad?
No. Debit and credit do not mean good or bad.
They simply represent the left and right sides of an accounting entry. Whether an account is debited or credited depends on its account type and whether its balance is increasing or decreasing.
Does a debit always mean money is coming in?
No. A debit does not automatically mean cash is coming into the business.
For example, Rent Expense is debited when rent expense increases, even though the business may be paying cash at the same time.
Analyze the accounts involved rather than relying on the direction of cash movement.
Should beginners memorize debit and credit rules?
Beginners should memorize the basic pattern, but practice is what makes the rules useful.
Learn how assets, liabilities, owner's equity, revenue, and expenses normally behave. Then apply those rules repeatedly to real transactions until you can explain an entry instead of simply recalling it.
Sources & References
- U.S. Securities and Exchange Commission — Beginners' Guide to Financial Statements
- OpenStax — Use Journal Entries to Record Transactions and Post to T-Accounts
- OpenStax — Adjustment Process and Common Adjusting Entries
Final Takeaway
Debit and credit rules become much easier when you apply the same reasoning process to every transaction.
Start by asking:
- What accounts are affected?
- What type of accounts are they?
- Did each account increase or decrease?
- Does the change require a debit or a credit?
Then verify one final requirement:
These debit and credit practice questions are designed to help you move beyond memorization and start analyzing transactions the way accounting entries are actually built.
If most of the exercises felt comfortable, the next step is to practice more complex journal entries, adjusting entries, and transactions involving multiple accounts. You can also use the Accounting Examples & Practice center for additional worked examples and exercises.
If several questions were difficult, review normal balances and repeat the exercises until you can explain the reasoning behind each answer.
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