What would you like to do?

What is the meaning of credit and debit in business accounting?

already exists.

Would you like to merge this question into it?

already exists as an alternate of this question.

Would you like to make it the primary and merge this question into it?

exists and is an alternate of .

Credit is giving money and debit is taking. A shop will debit its customers in exchange for goods and the customers will credit the shop for the goods.

In Accounting:
  • Debits represent increases in value of assets and expenses and decreases in income, liabilities and equity
  • Credits represent increases in liabilities, equity and income and decreases in assets and expenses

Example: To record the purchase for cash of office furniture

Debit Office Furniture and Credit Cash
The shop example above is an excellent example of the reason accounting seems backwards to most people. The way two parties account for a transaction is a mirror image. When shops and banks tell you they are crediting your account, they are telling you how they are accounting for it, which is backwards from the way you account for it.
12 people found this useful
Thanks for the feedback!

What are the rules for debit and credit in accounting?

There are three Golden Rules for Debit & Credit, whole accounting is depend on these three rules :- 1. Debit what comes in & Credit what goes out. 2. Debit the receiver & Cred

What is debit and credit in accounts?

  Using double entry book-keeping, every financial transaction has a debit and credit entry. The debit being a positive number, and the credit being negative. For example

Are accounts receivable a credit or debit?

Accounts receivable is a debit.  Answer:  Accounts receivable is an asset and therefore maintains a debit  balance. This is an account listing what a person or company

What are credit and debit balances in accounting?

A credit balance shows up on a vendor statement when you have returned defective goods, for example. You can call the vendor and request a check for that amount or apply it to

Is a contra account a debit or a credit?

That depends, it could be either. a contra-asset account would be just the opposite of an asset. All assets have a debit balance (increase with debit) therefore a contra-asset

Is a liability account a debit or a credit?

Remember the basic accounting equations Assets = Liabilities + Owners Equity (Stockholders Equity) Assets increase with a debit Liabilities as well as Equity increase with

How do you understand debit and credit in accountancy?

a credit is pay out, debit is pay in Debit and credit are part of the double-entry accounting system for adjusting different transactions in accounts. When creating a T ac

Is account payable a debit or a credit?

Accounts payable is the amount which is payable by company for themerchandise purchased by company but payment is due in future, asit is the liability of company so like all l