Credit
Definition
A credit is an entry on the right side of a journal entry. Credits increase liability, equity, and revenue accounts, and decrease asset and expense accounts.
Example
A business records $500 of service revenue. The entry credits (increases) Service Revenue by $500 and debits (increases) Cash or Accounts Receivable by $500.
Why It Matters
Knowing which accounts increase and decrease with credits is essential for building correct journal entries.