Difference between debit and credit

Credit is into your account, debit is out of your account.

Debit = left (represented by assets and expenses)

Credit = right (represented by liabilities, equity and revenue)

pready, why is my post innacurate. When banking, I debit my account and take out money, when crediting my account I put in money. So what is innacurate about that? For heavens sake, I have been banking since I was l6, I am now 66, give me a break!!

Anyone knows that who has a debit card for doing purchases in stores.

The OP didn't indicate it was an accounting question.

In Accounting there are what's called T-accounts for every account.

The T-account has three sections.
The account name goes above the T or in the top section.

The Debit is on the Left side or Section of the T.

The Credit is on the Right side or section of the T.

A Debit in an Asset or Expense Account Increases the Balance while a Credit Decreases the Balance

A Credit in a Liability, Equity, or Revenue Account Increases the Balance while a Debit Decreases the Balance.

Tickle,

In accounting a Debit is the left side of a T-account while a Credit is the right side of a T-Account.

For an example if your company receives cash for providing a service to a customer then the company will Debit Cash for the amount of Cash received and Credit Service Revenue for the amount Received.

If the Customer is a Business then they will Debit an Expense Account for the amount paid and Credit Cash for the amount paid.

In Accounting Debits equals Credits.

Thanks for the explanation, pready, much appreciated, but the OP is not saying it is an accounting issue. I do recognize your expertise from previous accounting issues though.

Tickle when you put money into a checking account the Bank credits your account because they owe you the money. In other words it is a Payable account to the Bank.

You would Debit the amount on your Books.

When the Banks makes a payment on your account they Debit their payable Account and you would credit your account.

Debit is on the left side of a T account, and that is the side were money or owners equity will go when you are adding to the company.

Credit is on the right side of a T account, and that is for if you are taking money away from the business.

A easy rule to learn Credit - Debit (entry)

WHAT COMES ON - DEBIT
WHAT GOES ON - CREDIT.

Example..- You bought a car for Rs. 180,000.00

simple. what comes to you i.e. CAR make it debit and what goes from your side is CASH, make it credit. now make entry

CAR... 180,000.00
... CASH... 180,000.00

Difference between debit and credit could be fully understood if you have a basic understanding of how accounting works. I'd recommend below article for you:

How accounting works (http://www.myhowtoos.com/en/at-work-howtoos/80-understanding-accounting-basics)

davide1982, this thread is from 2008. And that link is not a very good one because it's not actually teaching debits & credits (only vaguely mentions them at the end), and books don't use negatives for the credits like that. That's only going to confuse people... it's hard enough getting people to get the idea that charging something is not a negative to the payables account.

tickle, as long as someone dug up this old thread (and I wasted time reading it) - it's sort of obvious to me that the OP did mean it as an accouting issue. For one, no one would probably ever ask such a question if they were referring to their bank debit card. And second - it's in the Accounting forum. :-) (Granted, old thread and old issue.)

And pready, I think that's the first time I've ever seen anyone explain that whole debit/credit thing from the bank's side correctly. I really get tired of hearing that banks "do things backwards." I even hear accountants say that, which I find sad.

morgaine300, "teaching debits and credits" can't go separately without teaching double entry concept, assets-liabilities, income-expenditures... that's why I've advised that link. If you have you own way to explain what debits and credits mean, without even mentioning any other accounting principle I'd appreciate to see it)

A debit is the left side of a T-account and a credit is the Right side of a T-account.

An example is Depreciation:
Depreciation Expense account will have a Debit when you charge deprecian for equipment, and Accumulated Deprecian will have a corresponding credit.

When your Expense Accounts are closed your depreciation expense account will have a credit and your income summary account will have a corresponding Credit amount.

Notice this example does not involve cash at all!!

Difference between debit and credit.
There are three types of accounts.
Real Account: where the rule is DEBIT what comes in
CREDIT what goes out.
A real account is used for all assets

Nominal Account: Rule: DEBIT all expenses
CREDIT all Incomes or revenues

Personal account: Rule: DEBIT the receiver
CREDIT the giver.

Remember this hint : DEAD
D: Debit
E: Expenses
A: Assets
D: Debtors

CLIC:
C; credit
L: Liabilities
I: Income or revenues
C: Creditors

morgaine300, "teaching debits and credits" can't go separately without teaching double entry concept, assets-liabilities, income-expenditures........ that's why I've advised that link. If you have you own way to explain what debits and credits mean, without even mentioning any other accounting principle i'd appreciate to see it)

Did you read what I wrote. I did not say that explaining the double entry concept was not important. Nor did I say anything like "without even mentioning any other accounting principle..." Did I? You want to quote where I said or implied either of those things?

What I did say was that I thought the link was a bad example and that it might just serve to confuse people. I didn't say that everything it said was irrelevant -- I indicated what I thought was confusing about it. If you don't know what that was, reread my post. The link doesn't really explain debits & credits themselves at all. While you're stating that I think you can explain debits & credits without mentioning other accounting principles (which I never said), the link explains other accounting principles without explaining debits & credits. Get it?

Yes, I have my own way of explaining it, and I do know what generally confuses students, because I've been teaching it for 14 years. However, trying to thoroughly explain debits & credits in a post on a forum like this can be difficult. Since it's an old post, I'm not going to spend time answering the OP's question. As for explaining to anyone else, considering there's a lot to it, I'd rather address specific questions about it. I was addressing your post, not trying to answer the OP.

I had to read this whole thing again to get rid it off my profile. I hate math, but with on line banking I don't have to worry about balancing my cheque book anymore. I am not really that dumb, just challenged with numbers and too busy with other things like being a superhuman delivering healthcare to a few needy seniors and just hoping they are not going to pass away on me before I get to them. Long story, just visit the posts re 'socialized medicine'. Be happy and enjoy your weekend !

Tick

You do realize you just stuck in back into your profile again by answering it, right? LOL :-)

You do realize you just stuck in back into your profile again by answering it, right? LOL :-)

Yup, but thanks for the reply, morgaine !

You wouldn't happen to be from the east coast US, would you ? Just curious

Best regards

Ms tickle !

No, from the midwest. Any reason you ask?

Debit : left


Credit : right

Credit is when you do not have a limit you have to pay a monthly bill... whereas debit is from you bank account.

What is the difference between debit and credit

A debit is an entry to the left side of a T account and a credit is an entry to the right side of a T account.

let's answer this properly

on the humorous side the debit is on the side nearest the door and the credit on the side nearest the window

but seriously

a debit occurs where you gain value and a credit occurs where you give value

when you have money in the bank you have a debit balance in your bank account in your accounts you have gained value and the bank has a credit balance it must give you that value.

In the same way when you incur an expense you have gained that value and the value was given by your bank account or by your creditor