Education and Career Forum

what is dabit and credit
i always confuse with these terms.

Debit in the sense the amount which are going out from your or your bank account. Credit in the sense the amount of money which are coming to you or to your bank account from outside.

When you receive your salary, the particular salary amount is being transferred to your bank account. This is a credit.

When you have paid an Internet bill or did any shopping through online with credit or debit card, the particular amout of money will be transferred from your bank account. This is a debit.

I think you got some clarity with these words after giving these examples.

Let me explain you the meaning of debtor and creditor too.

When you borrow a particular amount of money from a person, you will become debtor to him and he is the creditor for you.

Debtor is the person who has borrowed money and has to pay the same. Creditor is the person who has lended money and has to receive the same at a future date.

These terms will extensively be used in Finance subject and in the finance oriented companies.

sir the term debit means your from your account only you will take your money

credit means you have to take money as loan from others

Debit and Credit are both related to accounting and part of accounting procedure.

The definition of Debit of an account is the amount is going out form the account and that of Credit of an account is the amount is coming in to an account.

The common example is when an amount is received the account is debited and when the amount is paid from that account it is credited.

These terms as related to accountancy, extensively used in business transaction in Banks, Companies, Traders etc.

Originally Posted by Unregistered

what is dabit and credit
i always confuse with these terms.

hi!!

DEBIT and CREDIT are just the opposite of each other.they are the two ways of transaction


First let me tell you something about TRANSACTION!!!!!!!!

TRANSACTION means the transfer of money from one account to the another . one can also say that if the amount of money is transferred from a Source to receiver.the source and receiver may vary,depending on the amount of money being transferred

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DEBIT
Debit means giving something or loosing something from your account.when you give some money from your account or in case the money is transferred from your account then it is called as DEBIT account

example
If you buy anything with your money then the amount of money will be transferred from your account whether it if through bank account or debit cards

USAGE
DEBIT cards are generally used for transaction through Debit card.moreover debit means to loose

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CREDIT
Means gaining something or taking something.that something when called in terms of account,then called as CREDIT.when some money is added to your account that money is termed as credit and when the money is added to your account then called as Credit account

example
at the time of DIWALI one gets increment and when that money is transferred to your bank account then your CREDIT increases

USAGE
credit is the amount added to your account.it is generally used when you gain a certain amount

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during debit

• ASSET increases

• LIABILITY decreases

• EXPENSE increases

• INCOME decreases

• capital decreases

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during credit

• ASSET decreases

• LIABILITY increases

• EXPENSE decreases

• INCOME increases

• CAPITAL increases

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hope this helped you.........


with regards
roknits

In language of accountant

In case of Personal Accounts (like bank institutions, capital account,accounts of customers accounts of suppliers)

debit the receiver,credit the giver

In case of real accounts (like land , building furniture account)- debit what comes in , credit what goes out

In case of nominal accounts (like salary,wages, insurance, telephone ,interest exp)- debit all the expenses, credit all the incomes

if you are commerce student than above written explanation will help you to solve the accounting problem.

dear friend.
debit and credit are the two aspects of every financial transaction. their use and implication is the fundamental concept in the double-entry bookkeeping system, in which every debit transaction must have a corresponding credit transaction(s) and vice versa.
debits and credits are a system of notation used in bookkeeping to determine how to record any financial transaction. in financial accounting or bookkeeping, "Dr" (Debit) means left side of a ledger account and "Cr" (Credit) is the right side of a ledger account.
to determine whether one must debit or credit a specific account we use the modern accounting equation approach which consists of five accounting elements or rules. an alternative to this approach is to make use of the traditional three rules of accounting for: Real accounts, Personal accounts, and Nominal accounts to determine whether to debit or credit an account.

Credit is what you borrow from the bank and have to pay back in the form of a bill each month.
Debit is where the money you're spending comes directly from your checking account. It's the same thing as having cash on you basically. When you pay with debit, most places will give you cash back from the register like an ATM if you choose to

what are formal and informal credits

what is meant by fox pro

Hello,

Both Debit and Credit are related to Banking terms,
*Debit: which mean the money will be going out of your bank account to the beneficiary to whom you are paying (e.g. : you pay 100 rs to your friend account, thus 100 rs is deducted from your account for paying your friend).
* Credit: Similar to debit but little difference is that the money here is coming to your account from the sender. (E.g.: if your friend send you 100 rs to your account, then 100rs will be added to the current amount that you have in your account)..

Hope this helps..

With reference to a simple bank account statement , a debit transaction is the one in which you took money from your account (withdrawal) and a credit transaction is the one in which money was added to your account (deposit). In simpler terms , when you take money from bank , the bank ‘debits’ your account. Likewise, when you pay money to the bank , it ‘credits’ your account.The account can be a savings , loan , fixed deposit or any type.

In real life or in business , if you give money to someone , you debit their account (in the financial accounting journals or books) as they borrowed from you. And when you receive money from others , you credit their account as they paid you.