What type of account increases with a debit entry?

In accounting, accounts are categorized into different types, each with its own rules regarding debits and credits. When discussing which type of account increases with a debit entry, asset accounts are the focus.

Assets represent resources owned by a business, such as cash, inventory, equipment, and property. According to the double-entry bookkeeping system, when an asset account is debited, it signifies an increase in the resources of the business. For example, when a company purchases a new piece of equipment and records this transaction as a debit in the equipment account, it reflects an increase in the company's assets, indicating that it now has more resources available.

In contrast, liabilities, equity, and revenues do not increase with a debit entry. Liabilities and equity accounts typically increase with credit entries, while revenues also increase with credits, as they contribute to the overall equity of the business. Understanding the role of debits and credits in different types of accounts is essential for accurate bookkeeping and financial reporting.