Debit/Credit confusion?

Question

For an asset account, I've learned that debit increases the balance. This makes perfect sense. So that it's straightforward to calculate net worth, it would make sense that when I buy something on a credit card, that would be a *decrease* (which is still a debit since it's a liability account). So am I right in saying that despite it being the normal state of affairs for a credit card account to be in the red, that it should still be displayed with a negative balance? This is to do with a hobby software project I'm working on that includes a (hopefully powerful but simple) accounting module. Many thanks in advance.

Answer 1

This is the only formula you’ll ever use to understand debits and credits:

Assets (debits) = Liabilities + Equity (credits)

In other words, “debits = credits” must be true for an accurate accounting balance.

Two accounts increase when a purchase is made with a credit card: 1) an expense account increases with a debit, and 2) a liability increases with a credit.