Is Revenue a Debit or Credit? Your Ultimate Guide on Accounting for Revenues

A $300 debit entry will have to be made to the business’s Accounts Receivable. Now, under accrual accounting, even though the sales revenue has not yet been received, the company has to record this revenue because it was earned. This means that the company will also record a $300 credit to the Sales Revenue account causing the owner’s equity to increase. The accounting equation appears in the structure of the balance sheet, where assets (with natural debit balances) offset liabilities and shareholders’ equity (with natural credit balances). When a sale occurs, the revenue (in the absence of any offsetting...