Debits and credits and confusion; Oh My!!?

Question

I am pretty smart and usually understand things pretty easily including anatomy and physiology. But I read about debits and credits in two different books on financial accounting, plus looked it up in wikipedia, and it has got to be one of the most confusing, non-sensical concepts I have ever run across. The books start by saying this will simplify the book keeping, and then proceed to an explanation that doesn't make any sense at all. Did they do this on purpose just to confuse people and make them feel stupid?

Can anyone explain "Debits and Credits" to me in a way that actually makes sense? I usually remember things better when they fit together well, like pieces of a puzzle that work together. Can anyone give me anything to help me learn this concept?

Thanks!

Where&#39;s my scooby snack? · Accepted Answer

You can learn to understand to identify the two basic components of each transaction:

1.what did you get?
2.where did it come from?
The debit is what you got
and 
The credit is the source of the item you received. 

Let's imagine that you purchase a computer with your credit card. Since the computer is what you received it's going to result in a debit to the asset account for your computer. The credit will be applied to the credit card liability account for the same amount. 

The banks tend to confuse us because they are telling us the entry to their liability account. When you deposit money in the bank, their liability to you increases. Since liabilities are credit accounts they are crediting our account. When they reduce their liability to us, they are debiting their liability account.

So, if you can identify what you received and where it came from in every transaction you have debits and credits mastered.

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Debits and credits and confusion; Oh My!!?

1 Answer