In order to properly conduct accounting, you need to understand the terminology. The same principle applies here as in the well-known expression “Learn materiel.”

That is, before doing anything, need to be competent in this very matter. And accounting is no exception to this rule. Let's start with something simple and try to explain everything in the most accessible language.

An accounting loan and a bank loan are two different things, and when working in accounting, it will be better if you completely forget the meaning of the word loan in everyday life.

Even the stress in the word “credit” falls on different syllables in these two areas. In banking, the stress falls on the last syllable, as in French, that is, the letter “I,” and in accounting, the stress falls on the first syllable, that is, the letter “E.” You need to be able to separate concepts so that you don’t get confused about their meanings later.

Now let's talk about the meanings of these two words, which are the basis in accounting. Again, do not confuse the meaning with banking operations, because the words “Debit” and “Credit” exist in this area.

In accounting, the word “Debit” in simple words means cash receipt, A consumables are called I am “Credit”, but don’t think that everything is so simple. These two concepts are more interconnected than they initially seem.

There is a rule in accounting that if a certain amount goes out, then it must come in. Which can be simply explained like this: If money leaves one magazine, then another magazine must be created for this money to come into it.

Let's try to understand it with an example. You have one accounting book, and you give a certain amount of money to the supplier for the goods. This amount must be recorded 2 times!

To do this, we will record this amount for the first time in our accounting book under the word “Credit”, since the money has left our pocket. And for the second entry, we need to create another journal for the supplier to whom this money came, but we will record it under the word “Debit”.

It is worth clarifying as an example we take working with money and describe everything in a simple way, but in real accounting not only cash is recorded, but also goods and property.

Using the same example, we can analyze everything again. You made 2 entries of money leaving your pocket and coming into the supplier’s pocket, but for this money the supplier must give you something in return. We will first record this product in the supplier’s journal under the word “Credit” and then in our accounting book under the word “Debit”.

This method of accounting is called double wiring from the word “double”, that is, write twice.

Record structure

After we have understood the basic concepts, we need to understand in what form this double wiring is recorded.

It has long been the case that Debit and Credit are written in two different columns, and the faster you remember and learn to use it quickly, the faster and better you will begin to keep your accounting records.

The left column is for incoming funds and property and is called “Debit”, and the right column is for outgoing funds and property and is called “Credit”.

You need to know this in order to easily navigate in the future, because there can be many accounts into which you need to enter information, but in each there is one scheme and one rule: Incoming money is in the left column, and outgoing money is in the right column.

What is Balance

So, now we have looked at the most basic concepts of accounting and found out how to keep records correctly, however, this is not all the knowledge that will be useful to you in this matter. Let's turn to the concept of balance.

Balance there are two types: debit balance and credit balance. In simple terms, this is account balance at the end of the month. Let's try to understand it with an example. To do this, let’s again take two accounts: our account and the supplier’s account.

We agreed with the supplier that we would pay for half of the goods this month, and the second half next month, and the full amount of the entire goods is twenty thousand rubles. So, first we write down the amount that we transferred, that is, ten thousand rubles. Don’t forget to write it down twice to our account and to the supplier’s account.

The supplier, in turn, brings us goods worth twenty thousand rubles - we write it down. Let's assume that there will be no transactions between our accounts this month, and let's sum up the results for the month.

To do this, subtract the smaller number from the larger number of each account. Thus, ten thousand rubles went out of our account on Credit, but goods worth twenty thousand rubles arrived on Debit. It turns out that the final balance on our account is Debit, since more funds came in than went out.

The supplier account is a different story. We transferred him ten thousand, but he brought us goods for twenty thousand. We subtract the smaller from the larger and get a final balance of ten thousand under the Credit. Such a record does not allow you to forget about your debts and helps you quickly calculate your profits.

Conclusion

Thus, we analyzed with examples main points of introducing accounting.

But remember that in real accounting the count may be several dozen and the complexity will increase several times, but there is nothing that cannot be understood.

Debit- an accounting term referring to the left side of an accounting account, which is in the form of a two-sided table.

In its turn credit- a term denoting the right side of an accounting account.

What is it used for?

Debits and credits are used to record each transaction that is to be recorded on balance sheet accounts. For example, receipt of payment for previously shipped goods from the buyer is reflected simultaneously in the debit of the “Current Account” account and in the credit of the “Settlements with Buyers and Customers” account.

Rules of application

By debit of active balance sheet accounts, i.e. accounts for registering assets of an enterprise, indicating the presence of assets at the beginning of the reporting period and their increase during the reporting period. For example, when funds are received, the amount received is reflected in the debit of the “Current Accounts” account.

The credit to the active balance sheet accounts reflects the decrease in the corresponding assets. For example, when paying from a current account, the payment is reflected in the credit of the “Current accounts” account.

By debit of passive balance sheet accounts, i.e. The accounts for registering the sources of funds (liabilities) of the enterprise reflect the decrease in the sources of funds of the enterprise. For example, if an enterprise receives a loss at the end of the reporting period, the amount of the loss is reflected in the debit of the “Retained earnings (uncovered loss)” account, thereby reducing the enterprise’s sources of funds.

The credit of passive balance sheet accounts indicates the availability of sources of funds for the enterprise at the beginning of the reporting period and their increase during the reporting period. For example, the profit received by an enterprise at the end of the reporting period is reflected in the credit of the “Retained earnings (uncovered loss)” account, thereby increasing the enterprise’s sources of funds.

Reflecting an operation on the debit of an account is called “debiting”, and on a credit - “crediting” the account.

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The terms “debit” and “credit” are familiar to almost every person, even those not associated with accounting. However, what exactly is meant by them is not known to everyone. At the same time, these concepts are needed not only by specialists, since they help streamline financial flows not only in an enterprise, but also in the personal budget of each family.

Debit-credit in simple words

Debit and credit are central concepts in accounting. These terms were known 500 years ago. The first mentions of them date back to medieval Italian entrepreneurship. Knowledge of Latin will help you understand these terms better. So, debet means “they owe me”, and credit means I owe.

Credit and debit denote monetary amounts, as well as material assets in monetary terms. In the simplest words, debit represents profit from the results of the operation of the enterprise, and credit represents expenses for individual items: wages, materials, maintenance of the management apparatus, etc.

At the same time, to organize the information, monetary amounts are assigned to one or another account depending on whether it is an incoming or outgoing transaction, on the period of placement of funds, on the purpose of the amount of money, etc.

Accountants and other interested parties use a special Chart of Accounts, which is regularly updated. We will get acquainted with accounts in more detail in the next section.

From a graphical point of view, debit and credit are entries in a table on the left or right side.

Active and passive accounting accounts, subaccounts

To understand the concepts in detail, you should take a short excursion into the basics of accounting. The concepts of debit and credit are closely related to active and passive balance sheet accounts. Therefore, let's understand these terms first.

Accounting is maintained at every enterprise and is necessary to reflect movements in accounts. The latter are divided into three types:

• active;
• passive;
• active-passive.

On active accounts those amounts that are at the disposal of the organization are taken into account. They are divided by type. According to the Chart of Accounts, several codes are distinguished: from 01 (“Fixed assets”) to 97 (“Deferred expenses”).

Let's look at some of the nuances associated with active accounts:

• they only have a debit balance at the beginning or end of the period;
• for a loan, transactions are recorded based on the expenditure of assets, and for a debit, transactions are recorded based on income.
• the active part of the balance displays the balance. It means the presence of an asset in monetary terms.
• To calculate the final balance for the period, you should subtract the credit turnover from the sum of the balance of the opening and debit turnover.

Passive accounts combine the sources of the amounts recorded for the asset. Let us note the following nuances associated with them:

• in credit, entries indicate an increase in sources, and in debit - their decrease (remember that for active accounts everything happens the other way around);
• the balance can only be a credit balance (as opposed to active accounts);
• To find out the balances at the end of the period, you should calculate the sum of the balance of the initial and credit turnover and subtract the debit turnover from it.

Accounts can also be active-passive. If the active account displays the organization’s funds, and the passive account displays their sources, then the active-passive account can be indicated in two opposite balance sheet lines. Depending on the company’s performance, they may also contain balances that are indicated on only one side.

To record correctly, each situation should be analyzed separately. For example, if amounts are classified as liabilities, then movement in the account occurs as in a passive account, and vice versa. Here are examples of active-passive accounts:

• settlements with entities that can be both debtors and creditors;
• retained earnings or loss;
• financial results of the activities of a business entity.

In addition to the accounts discussed above, there are also subaccounts. They are intermediate links between analytical and synthetic accounts. They help group indicators.

Double entry in accounting

This is another important term that is useful for understanding the essence of debit and credit. This method is an accounting method that is the basis for the formation of information about recorded objects.

In the balance sheet of any organization, the same amount is reflected in the debit of one account, but also in the credit of another. In this case, the accounts interact with each other, or correspond. It is called correspondence of accounts.

Please note that any transaction is reflected on the basis of primary documents. They confirm this operation. Double entry allows stakeholders to understand the sources of funds and their distribution.

As a result, the asset should always be equal to the liability on the balance sheet. This shows the accuracy of the accounting entries.

Video explains what double entry is in accounting:

Balance sheet

To better understand debit and credit, let's look at the organization's balance sheet. This is the fundamental form of reporting for any enterprise or bank. It displays the company's funds in monetary terms on a specific date. At the same time, other forms of reporting are prepared for the balance sheet, explaining and explaining its data. The balance sheet reflects active transactions first, then passive ones.

There are strict standards for completing balance sheet items. Accounting accounts serve as sources of information. Each of them has two parts: debit and credit. Every accounting account has an opening balance, or balance. Subsequently it decreases or increases. You can set the ending balance at any time. To do this, add the amount of the increase to the original balance. And subtract the amount of reduction from the resulting balance.

One of the main rules of accounting is that any information must be documented. Therefore, information is entered into the balance sheet based on data from the relevant reports.

Another important point: when reflecting the financial result, full months are taken into account, which is associated with the monthly closure of accounts.

Assets are divided according to time: short-term and long-term. They can accordingly be negotiable or non-negotiable. Liability items are divided into equity and borrowed capital. Borrowed capital consists of short-term and long-term liabilities.

Let us note the following nuances that are important for drawing up the organization’s balance sheet:

• the value of the items “fixed assets” and “intangible assets” is indicated after deduction of depreciation;
• the amount of inventories is reduced by the amount of created reserves and the trade margin;
• balance sheet items that account for credit obligations and financial investments are divided by maturity;
• detailed display of receivables and payables in assets and liabilities.

How is debit different from credit?

Now you can fully introduce the concepts of debit and credit.

For active and passive accounts, debit and credit will be different. Thus, a debit represents the receipt of funds in active accounts, and a credit records expenditure transactions in active accounts. On passive accounts, everything happens the other way around.

To better understand the terms, let's look at the accounting entries. Accounting entries represent the movement of funds across accounts, which is reflected in the balance sheet using the double-entry method. To do this, income is reflected on the left side of the table, and expenses are reflected on the right. Those. Dt (debit) is recorded on the left, and Kt (credit) is recorded on the right.

With the help of these tables, any operation performed by the organization is recorded. The important thing is that they are displayed in both the right and left columns at the same time.

The main difference between these two concepts is that a credit is a decrease in the assets of a business, and a debit is an increase.

A credit is reflected in liabilities as an increase in the company's liabilities, and a debit shows their decrease.

The easiest way to show the differences between the accounts is with an example. We will present it in the next section.

Debit and credit plastic card

The concepts of debit and credit are also important for understanding the basic functioning of plastic cards. Currently, almost every resident of the country has at least one card. Such cards can be divided into two main types:

• debit;
• credit

Everyone knows about a credit card. This is access to an account from which an entity can borrow a certain amount of money (limit). However, not everyone knows that a regular card to which salaries are received is a debit card.

Let's remember what debit is. This is when “we are owed”. Therefore, according to debit card its holder receives amounts of money (for example, the same salary).

At the same time, at the request of the holder, it can be used, that is, he can spend funds above the account balance by an agreed amount, i.e. and “go into minus.” He will be able to return the funds to the bank the next time he credits the card. They will be written off automatically.

The main purpose credit card– in spending funds that do not belong to its holder, i.e. he takes them on credit (remember, the translation of credit from Latin is “I owe”).

All this makes a credit card an excellent alternative to a cash loan. However, the interest rate on it is significantly higher. At the same time, many banks offer a preferential interest-free lending period.

Thus, debit and credit are fundamental accounting terms. They are important for drawing up a balance sheet and implementing the double entry method.

Video - double entry in accounting, what is it:

The financial budget of a large company or any Russian family consists of income, that is, cash receipts, and expenses, the cost of paying for services and purchasing goods. In accounting, these transactions are called debits and credits. In the article we will look at the key concepts of these operations, and also define what a debit account means.

Account "Debit" and account "Credit" in accounting

All business operations of an economic entity have two directions:

1. Profitable, that is, those facts of economic activity that lead to an increase in financial indicators, an increase in the material and technical base, an increase in the solvency and profitability of the enterprise.
2. Expenses that are aimed at purchasing goods, works or services necessary to ensure the life of the enterprise as a whole. For example, payment of utilities, payroll of staff, purchase of material and technical assets, fuel and lubricants and raw materials for production.

Consequently, the debit of the account is all income (receipt) transactions and facts of the economic activity of an economic entity, be it an ordinary citizen, a family or a company. A loan, accordingly, is an expense.

These concepts are widely used in accounting and are inextricably linked. Thus, the main method of maintaining accounting is to reflect business transactions using the double entry method. In simple terms, one specific business transaction in the life of an economic entity is registered in the accounting system simultaneously as a debit to one account and a credit to another. That is, the double entry method is the procedure for compiling accounting records - postings.

Debit and credit in the balance sheet

The balance sheet is not just a report that characterizes the financial performance of a company. This is a reflection of the results of the correct registration of business facts using the double entry method.

How to understand this? In other words, when registering any transaction (operation, fact) in accounting, a posting is generated that affects two synthetic accounting accounts at once. Moreover, for one, the transaction is reflected as a debit, and for the second, as a credit. As a result, the turnover according to these indicators is compared. This results in the left side of the balance sheet (assets) being equal to the right side (liabilities). If discrepancies arise between assets and liabilities, then this situation indicates the presence of accounting errors.

Balance sheet assets are monetary, property and intangible assets that belong to the company. Typically, such indicators are formed as a balance on the debit side of the account. Dt account balance - what is it? This is data on the availability of monetary, property and intangible assets of the organization. Debit turnover is an operation for the receipt of similar indicators. However, for passive accounting accounts, the exact opposite conditions apply.

Balance sheet liabilities are expenses, liabilities, as well as sources from which the company's property and assets were formed. The credit balance is the amount of debt, and the credit turnover is an expense transaction. However, this rule only applies to active accounts. If the BSC has a passive attribute, then the credit to such an accounting account is a receipt (increase).

What is a debit bank account

The concept of “debit” from accounting is often confused with the concept of a debit current account in a bank. However, these concepts do not have significant differences. Therefore, what kind of account is a debit account?

A debit account is the account that is opened in a banking organization to place client funds. That is, the client (individual or legal entity) opens a bank account for storing, investing and spending his own money. An example would be bank deposits (passbooks) or bank cards. For example, the popular Mir salary card.

Account debit prohibition - what is it?

Some bank deposits have a number of restrictions and conditions of use. One of these restrictions is the prohibition of debiting the account. When opening a deposit with a debit ban, the client simply will not be able to deposit his funds to this account. In other words, a cash account with a ban on debiting does not provide for the performance of incoming transactions.

However, some banks may temporarily block the ability to receive payments via bank cards. Such blocking may be caused by questionable transactions on account. To avoid fraudulent activities, the bank employee blocks the card. To unblock, you should contact the nearest bank office.

When faced with the need to keep records of business transactions at work, turning to accountants, businessmen often hear the terms “debit” and “credit” from them. It is very difficult to understand on your own what this means, especially if a person is far from accounting and finance. Let's try to explain the meaning of the concepts “debit” and “credit” in simple words.

What are debit and credit used for?

The words “debit” and “credit” are used in relation to the accounting accounts of funds and business transactions. An accounting account (in a simplified presentation) reflects a group of homogeneous (similar in meaning and content) accounting objects in monetary and quantitative, if possible, terms. For example, account 50 “Cash” takes into account cash, account 10 “Materials” has both quantitative and monetary content, just like account 41 “Goods”. So, debits and credits in accounting reflect the presence of assets (funds, materials, inventories, products) and/or liabilities. These concepts are used for accounting by accounts.

What is reflected in debit and credit

A posting is a record of a transaction performed on the accounting accounts. All accounts are combined into a general accounting chart of accounts, approved by order of the Ministry of Finance (order of the Ministry of Finance of the Russian Federation dated October 31, 2000 No. 94n). Accounting entries, debits and credits for them, carry information about what happened in business life (entered or exited), and what consequences this entailed for the financial and property condition of the company.

Accounting entry: debit and credit

On the same account, entries are made for both receipts and departures. Figuratively speaking, debit is the left side of the account, and credit is the right.

The debit and credit of the account show the movement of property in the broad sense of the word, as a change in value expression due to a fait accompli. For example:

materials arrive - the debit of account 10 reflects the receipt,

materials are written off for production - credit 10 of the account reflects their disposal.

That is, there are both debit and credit entries for the same account.

For active accounts, the account balance at a certain point in time is debit, for passive accounts it is credit (otherwise the account balance is called “balance”). What does it mean? Let's take a closer look.

For active accounts

For example, the balance on account 10 (materials) is either greater than zero or zero - that is, in this account there are either assets or there are none; there should not be a negative value. The account is active (takes into account assets) - and the balance, if any, is listed as a debit (i.e. materials are available).

The fixed assets account (01), cash accounts (50, 51, 52), etc. are also active. Thus, an entry into an active account is a debit, and a disposal, a decrease in value (by any means - sale, write-off, release into production, etc.) etc.) – loan.

For passive accounts

If the account is passive, then the balance on it is credit or zero. That is, the account reflects the company’s debt, which either exists or is equal to zero; the debt cannot take a negative value.

An example of such a passive account is 66, introduced for settlements on short-term credits and loans. Receipt of a loan (debt has arisen) is reflected by posting to credit account 66. Receipts from passive accounts, i.e. the occurrence of debts in a company is a credit, their reduction is a debit. The balance in the form of an obligation to repay the loan will remain on the loan until the loan is repaid or written off.

The expression “accounts payable” means that a company has a debt to another entity (counterparty).

For active-passive accounts

Some accounts may have both debit and credit balances. For example, the 62nd account for settlements with customers. We received an advance for goods - an obligation has arisen, this is a credit to account 62 (“we owe”). The products have been shipped, but the buyer has not yet paid - this is a debit to account 62 (“they owe us”).

The balance can be either a credit or a debit. The widely used expression “accounts receivable” refers to the receivables receivable from counterparties listed in the debit of accounts.

The concepts of the words “debit” and “credit”

Based on the information provided, you can derive simple definitions of what debit and credit are:

debit is what the organization has, these are assets of any kind: property, valuables, debts to be reimbursed by third-party organizations (“they owe us”);

a loan is a company’s debts and obligations to third parties (“we owe”).

The difference between debit/credit is the balance, i.e. the value expression of the account balance. Balance indicates the value of an existing asset or liability.

As can be seen from the definitions, the meaning of debit and credit is not at all as complicated as it might seem at first. And it’s not just members of the accounting profession who can use these words correctly and appropriately.