Debit vs. Credit
Debit and Credit are two terms used mostly in Banks and are associated to money and dealings. These are entries in double entry bookkeeping made in account ledgers in order to keep records of variation occurs as the business transactions take place. Generally, the source account for the transaction is termed as Credit and the destination account is called as Debit. The difference between total debits and total credits within a single account is known as the account's balance. Debit is a sum of money taken from a bank account. Credit is a sum of money placed into a bank account. Debit is an accounting entry. Credit is an accounting entry. In an Asset Account, a Debit increases the balance and a Credit decreases the balance. For liability accounts type, Debit decreased the balance and credit does the opposite. A Debit decreases the balance in Equity Accounts where balance is increased by Credit. Accounts containing a Debit balance will increase the amount when a Debit is added to them but it will reduce after a credit is added; however, it depends on the types of accounts. In Cash sale, cash amount is Debit and the Revenue Account is Credit. The following example will help in differentiating Debit and Credit. Suppose if a factory sells its product to a buyer for cash of $10, it provides a revenue of the same mount to the seller with the same case in the box. The cash will be recorded in increase of cash amount for debit account and an increase of the revenue account with a credit and the entry is Cash=Revenue, Debit-$10, and Credit=$10. On the other hand, the company buys an equipment against #10 on credit. It will be an addition to the existing, fixed assets account with a debit and an increase in the accounts payable account in a credit and the entry will be: Assets=Accounts Payable, Debit=$10, and Credit=$10.
Key Differences
Debit means Left or Left Side; Credit account is listed on the Right Side of another account
Credit is a sum of money put into a bank account; Debit is a sum of money taken from a bank account
Debit stands for purchasing with one's own money; Credit is to buy by borrowing money
Janet White
Apr 02, 2016
General ledger accounts contain sides for both Debit and Credit
Credit is written in the abbreviation term as 'Cr'; Debit is abbreviated as 'Dr'
Harlon Moss
Apr 02, 2016
Comparison Chart
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Credit is basically a trust, allowing one party to provide money or resources in place of money to another party
A Debit is an accounting entry, recorded against one account.
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Function
Provision of money is not a compulsion in Credit and the idea applied in barter economies, basing on the direct exchange of goods and services.
A Debit increases the balance in Asset Accounts, while decreases in Liability Accounts and in Equity Accounts
Usage
Used by businessmen
Used by everyone
Debit and Credit Definitions
Debit
An item of debt as recorded in an account.
Credit
An arrangement for deferred payment of a loan or purchase
A store that offers credit.
Bought my stereo on credit.
Debit
The left-hand side of an account or accounting ledger where bookkeeping entries are made.
Credit
The terms governing such an arrangement
Low prices and easy credit.
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Debit
An entry of a sum in the left-hand side of an account.
Credit
The time allowed for deferred payment
An automatic 30-day credit on all orders.
Debit
The sum of such entries.
Credit
The deduction of a payment made by a debtor from an amount due.
Debit
To enter (a sum) on the left-hand side of an account or accounting ledger.
Credit
The positive balance or amount remaining in a person's account.
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Debit
To charge with a debit
If you use an ATM, the bank will debit your account immediately.
Credit
A credit line.
Debit
In bookkeeping, an entry in the left hand column of an account.
A cash sale is recorded as debit on the cash account and as credit on the sales account.
Credit
Reputation for solvency and integrity entitling a person to be trusted in buying or borrowing
You should have no trouble getting the loan if your credit is good.
Debit
A sum of money taken out of a bank account. Thus called, because in bank's bookkeeping a cash withdrawal diminishes the amount of money held on the account, i.e. bank's debt to the customer.
Credit
Official certification or recognition that a student has successfully completed a course of study
He received full credit for his studies at a previous school.
Debit
To make an entry on the debit side of an account.
Credit
A unit of study so certified
This course carries three credits.
Debit
To record a receivable in the bookkeeping.
We shall debit your account for the amount of the purchase.
We shall debit the amount of your purchase to your account.
Credit
Often credits An acknowledgment of work done, as in the production of a motion picture or publication
At the end of the film we stayed to watch the credits.
Debit
Of or relating to process of taking money from an account
Credit
Influence based on the good opinion or confidence of others
Used his credit with the police to get them to devote more time to the case.
Debit
Of or relating to the debit card function of a debit card rather than its often available credit card function en
Credit
Recognition or approval for an act, ability, or quality
Gave them credit for a job well done.
Debit
A debt; an entry on the debtor (Dr.) side of an account; - mostly used adjectively; as, the debit side of an account.
Credit
A source of honor or distinction
This exceptional athlete is a credit to our team.
Debit
To charge with debt; - the opposite of, and correlative to, credit; as, to debit a purchaser for the goods sold.
Credit
A reputation for sound character or quality; standing
It is to their credit that they worked so hard without complaining.
Debit
To enter on the debtor (Dr.) side of an account; as, to debit the amount of goods sold.
Credit
Belief or confidence in the truth of something
"They give no credit to [his] scurrilous assertions" (John Edgar Wideman).
Debit
An accounting entry acknowledging sums that are owing
Credit
To give as a credit
Credited $500 to her account.
Debit
Enter as debit
Credit
To give a credit to
Credit an account.
Credit
To give or award an educational credit to.
Credit
To regard as having performed an action or being endowed with a quality
Had to credit them with good intentions.
Credit
To ascribe or attribute
Credit the invention to him.
Credited her recovery to an innovative treatment.
Credit
(Archaic) To bring honor or distinction to.
Credit
(transitive) To believe; to put credence in. British usage?
Someone said there were over 100,000 people there, but I can't credit that.
Credit
To add to an account.
Credit accounts receivable with the amount of the invoice.
For the payroll period credit employees' tips to their wages paid account and debit their minimum wage payable account.
The full amount of the purchase has been credited to your account.
Credit
(transitive) To acknowledge the contribution of.
I credit the town council with restoring the shopping district.
Credit the point guard with another assist.
Credit
(transitive) To bring honour or repute upon; to do credit to; to raise the estimation of.
Credit
Reliance on the truth of something said or done; faith; trust.
Credit
(uncountable) Recognition, respect and admiration.
I give you credit for owning up to your mistake.
He arrived five minutes late, but to his credit he did work an extra ten minutes at the end of his shift.
Credit
(countable) Acknowledgement of a contribution, especially in the performing arts.
She received a singing credit in last year's operetta.
Credit
Written titles and other information about the TV program or movie shown at the beginning and/or end of the TV program or movie.
They kissed, and then the credits rolled.
Credit
A privilege of delayed payment extended to a buyer or borrower on the seller's or lender's belief that what is given will be repaid.
In view of your payment record, we are happy to extend further credit to you.
Credit
The time given for payment for something sold on trust.
A long credit or a short credit
Credit
A person's credit rating or creditworthiness, as represented by their history of borrowing and repayment (or non payment).
What do you mean my credit is no good?
Credit
(accounting) An addition to certain accounts; the side of an account on which payments received are entered.
Credit
(tax accounting) A reduction in taxes owed, or a refund for excess taxes paid.
Didn't you know that the IRS will refund any excess payroll taxes that you paid if you use the 45(B) general business credit?
Credit
A source of value, distinction or honour.
That engineer is a credit to the team.
Credit
(science fiction) A unit of currency used in a fictional universe or timeframe.
To repair your star cruiser will cost 100,000 credits.
Credit
A nominal unit of value assigned outside of a currency system.
Would you like to play? I put in a dollar and I've got two credits left.
Credit
(uncountable) Recognition for having taken a course (class).
If you do not come to class, you will not get credit for the class, regardless of how well you do on the final.
Credit
(countable) A course credit, a credit hour – used as measure if enough courses have been taken for graduation.
Dude, I just need 3 more credits to graduate – I can take socio-linguistics of Swahili if I want.
Credit
Reliance on the truth of something said or done; belief; faith; trust; confidence.
When Jonathan and the people heard these words they gave no credit unto them, nor received them.
Credit
Reputation derived from the confidence of others; esteem; honor; good name; estimation.
John Gilpin was a citizenOf credit and renown.
Credit
A ground of, or title to, belief or confidence; authority derived from character or reputation.
The things which we properly believe, be only such as are received on the credit of divine testimony.
Credit
That which tends to procure, or add to, reputation or esteem; an honor.
I published, because I was told I might please such as it was a credit to please.
Credit
Influence derived from the good opinion, confidence, or favor of others; interest.
Having credit enough with his master to provide for his own interest.
Credit
Trust given or received; expectation of future playment for property transferred, or of fulfillment or promises given; mercantile reputation entitling one to be trusted; - applied to individuals, corporations, communities, or nations; as, to buy goods on credit.
Credit is nothing but the expectation of money, within some limited time.
Credit
The time given for payment for lands or goods sold on trust; as, a long credit or a short credit.
Credit
The side of an account on which are entered all items reckoned as values received from the party or the category named at the head of the account; also, any one, or the sum, of these items; - the opposite of debit; as, this sum is carried to one's credit, and that to his debit; A has several credits on the books of B.
He touched the dead corpse of Public Credit, and it sprung upon its feet.
Credit
To confide in the truth of; to give credence to; to put trust in; to believe.
How shall they creditA poor unlearned virgin?
Credit
To bring honor or repute upon; to do credit to; to raise the estimation of.
You credit the church as much by your government as you did the school formerly by your wit.
Credit
To enter upon the credit side of an account; to give credit for; as, to credit the amount paid; to set to the credit of; as, to credit a man with the interest paid on a bond.
Crove, Helmholtz, and Meyer, are more than any others to be credited with the clear enunciation of this doctrine.
Credit
Approval;
Give her recognition for trying
He was given credit for his work
Give her credit for trying
The credits were given at the end of the film
Credit
Money available for a client to borrow
Credit
An accounting entry acknowledging income or capital items
Credit
Used in the phrase `to your credit' in order to indicate an achievement deserving praise;
She already had several performances to her credit
Credit
Arrangement for deferred payment for goods and services
Credit
Recognition by a college or university that a course of studies has been successfully completed; typically measured in semester hours
Credit
A short note recognizing a source of information or of a quoted passage;
The student's essay failed to list several important citations
The acknowledgments are usually printed at the front of a book
The article includes mention of similar clinical cases
Credit
An entry on a list of persons who contributed to a film or written work
Credit
Give someone credit for something;
We credited her for saving our jobs
Credit
Give credit for;
She was not properly credited in the program
Credit
Accounting: enter as credit;
We credit your account with $100
Credit
Have trust in; trust in the truth or veracity of
What is Credit?
Credit is basically a trust, allowing one party to provide money or resources in place of money to another party where the second party does not reimburse the former right away, but rather arrange either to repay or return the received resources later on. Provision of money is not a compulsion in Credit and the idea applied in barter economies, basing on the direct exchange of goods and services. Types of Credit includes banks, commerce, consumer credit, investment credit, public credit, real estate credit etc. When it is used for commercial trading, it terms as ‘trade credit’. Credit is usually not for financially weak parties, or companies as organizations only offer it to such clients whom they know are financially strong.
What is Debit?
A Debit is an accounting entry, recorded against one account. A Debit increases the balance in Asset Accounts, while decreases in Liability Accounts and in Equity Accounts. Debiting an account stands for entering an amount on the left side of the account. All the asset accounts hail in Debit and are considered Left Side. The Debit accounts have debit balances. When debits exceed credits, the account’s balance becomes Debit but when credits exceed debits, the account gets Credit balance.
