I'd recommend you avoid this article. It is more confusing than necessary, and the accounting entries (at least in the first example) are wrong/unconventional.

I'd recommend you avoid this article. It is more confusing than necessary, and the accounting entries (at least in the first example) are wrong/unconventional. The articles mentioned by dragonsh (Beancount documentation) and mtlynch (Martin Kleppmann's site) are great. But I feel unsatisfied by the way they discourage understanding of debits and credits, by just giving you something to memorize, e.g. "Now, by convention, accountants flip the sign on all of the blue and pink nodes’ balances, which means that the two sums end up being equal. And that’s why it’s called a balance sheet." You don't need to memorize which accounts are negative and which are positive. Just relate them to the English words 'debtor' (someone who owes money) and 'creditor' (some who is owed money), and you can work out the right entries for any transaction. You credit (CR) an account when you're recording: - an increase in the amount your company owes, or - (equivalent) a decrease in the amount some other entity owes your company The other entity could be a supplier, a customer, or one of your own shareholders. Examples of credits that can be identified by the above rule: - A customer pays you some money they owed you: CR 'Assets - Accounts Receivable' - A supplier sends you an invoice: CR 'Assets - Accounts Payable' - You send an invoice to a customer: CR 'Revenue' The last example might be confusing at first. Why is revenue like something you 'owe' someone? Because any profit the company you make does not really belong to the company, but to the shareholders. If you can work out whether one side of a transaction is a debit or a credit, you know the other side is the opposite. So, for the above transactions: CR 'Assets - Accounts Receivable' / DR 'Cash' CR 'Assets - Accounts Payable' / DR 'Expenses' CR 'Revenue' / DR 'Assets - Accounts Receivable'