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Feb 16, 2016 · In accounting, a liability (loans, owners capital etc) is a credit balance and asset (cash, buildings and such) is a debit balance. Your account is a liability to the bank (in accounting parlance that is because they owe you every single penny that is there in your account, btw, in literal parlance too if you really make their life harder ;))
Oct 17, 2011 · As an Example: for $500 that the bank credited to your checking account, you would post a debit to Cash and a Credit to Income Earned. The accounting equation is: Assets = Liabilities + Owner's Equity $500 = $500 Cash is the "Asset" side of the equation, Income is part of Owner's Equity, and so is the Credit side... to make the equation balanced.
Debits and Credits are accounting terms and refer to double column accounting (the most common accounting system used). The way a set of accounts works is, accounts are set up under the following broad headings: Assets (what you have) Liabilities (what you owe) Equity (what you own) Income (or Revenue) Cost of Goods Sold; Expenses
Dec 9, 2023 · Stack Exchange Network. Stack Exchange network consists of 183 Q&A communities including Stack Overflow, the largest, most trusted online community for developers to learn, share their knowledge, and build their careers.
Sep 23, 2023 · Stack Exchange Network. Stack Exchange network consists of 183 Q&A communities including Stack Overflow, the largest, most trusted online community for developers to learn, share their knowledge, and build their careers.
May 27, 2011 · 6. The store credit you recieved would be a liability to the company until either you use it or it expires. They would credit their cash account and debit accounts payable. Once you make a purchase they will similarly credit accounts payable and debit their inventory account. I used simplistic account names, but the company more than likely has ...
2. Waddler said it right, it depends on whether or not it is going against asset or liability. Your salary is said to be credited in bank's term, whereby the bank experiences a increase in its liability (your bank deposits) and hence its a credit for them. We usually understand that its a credit for us, however not. This is what I understand.
Sep 6, 2018 · Unfortunately accounting questions are considered off-topic here. Double-entry bookkeeping is indeed quite old, so it's kind of like asking why we have numerator and denominator instead of something easier like top and bottom, they were accepted long ago as the terms and there's not an alternative good enough to buck hundreds of years of history.
Feb 1, 2020 · A credit is an accounting entry that either increases a liability or equity account, or decreases an asset or expense account. It is positioned to the right in an accounting entry. For consumers -- and businessmen who aren't accountants -- the bolded part "credit ... increases a liability" is what matters.
Aug 13, 2012 · Your first and second paragraphs are two different cases. Moving money between a checking account and a savings account will credit Cash and debit Cash, making a GL transaction unnecessary, unless the amounts in the two bank accounts are tracked as two separate GL accounts.
