How to calculate debit and credit. What are debit and credit in simple words. Debit and credit plastic card

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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Debit and credit

Debit And credit- standardized methodological accounting techniques. They reveal the possibilities of economic processes and their direction, and they also set boundaries for these possibilities.

Debit- left side of the ledger account. For active and active-passive accounts, an increase in debit means an increase in the property or property rights of the organization. For passive accounts, an increase in debit means a decrease in the organization's own funds (sources). Comes from Lat. debet, which means "he must". The Latin word for this term is debitum - “debt”.

Credit- the right side of the ledger account. For active and active-passive accounts, an increase in credit means a decrease in the value of property or property rights of the organization. According to passive accounts, an increase in credit means an increase in the organization's own funds (sources).

There are two types of accounts: active and passive. Passive means borrowed funds; active - placed funds of a company, enterprise or bank. For active accounts, debit is income, credit is expense. For passive ones, credit is income, debit is expense.

Basic information

The left side of the accounting account, denoting (to simplify somewhat) the property or property rights of the enterprise in the context of the facts recorded in the account.

There are concepts debit balance invoices for a certain date and debit turnover accounts for a certain period of time.

Debit balance- monetary assessment of the value of property or property rights of an enterprise recorded in the account at a certain point in time.

Debit turnover- the total monetary value of all business transactions over a period of time that led to an increase in property/property rights or a decrease in the source of property formation, which are recorded on the account in question.

In active accounts, funds move from credit to debit.

In passive accounts, funds move from debit to credit.

Strictly speaking, when reflecting business transactions, debit turnover in active accounts means an increase in the amounts taken into account (active accounts usually take into account the property or property rights of the enterprise or costs). Debit turnover in passive accounts means a decrease in the amounts taken into account (passive accounts usually take into account revenue and various types of debt of the enterprise).

Frequently used term debit posting has no independent meaning; the debit of a transaction means the debit of the account that the transaction affects.

The table below indicates on which side this or that article increases or decreases (at the moment):

Notes

Links

• // Encyclopedic Dictionary of Brockhaus and Efron: In 86 volumes (82 volumes and 4 additional ones). - St. Petersburg. , 1890-1907.

Wikimedia Foundation. 2010.

See what “Debit and credit” are in other dictionaries:

magazine "Debit and Credit"- magazine "Debit and Credit" (1914) Monthly reference magazine of finance, trade and industry, published in St. Petersburg. Its publisher was V.I. Riedel. The ideas of the magazine "Debit" were taken as a basis: exposing... ... Technical Translator's Guide

MAGAZINE "DEBIT AND CREDIT"- (1914) monthly reference magazine of finance, trade and industry, published in St. Petersburg. Its publisher was V.I. Ridel. The ideas of the magazine Debet were taken as a basis: exposing criminals and debtors. Only six came out in a year... ... Great Accounting Dictionary

Accounting Key concepts Accountant Accounting Revolving balance sheet General ledger Credit Debit Cost Double... Wikipedia

- (lat. he believes) 1) in accounting means: “I must”, or “I have to issue” 2) the right expense page in the accounting books. Dictionary of foreign words included in the Russian language. Chudinov A.N., 1910. CREDIT 1) the ability to borrow money,... ... Dictionary of foreign words of the Russian language

Ushakov's Explanatory Dictionary

1. CREDIT [re], credit, husband. (lat. credit he believes) (thumping). The account of a person or institution lending something; ant. debit. Debit and credit. 2. LOAN, loan, husband. (lat. creditum debt). 1. units only Commercial trust; provision of goods... Ushakov's Explanatory Dictionary

credit- and credit. In meaning “account of debts and expenses” credit. Debit and credit. In meaning “providing valuables (money, goods) on credit; confidence; a sum of money released for something" loan. Issue goods on credit. Use credit. Loans for... ... Dictionary of difficulties of pronunciation and stress in modern Russian language

Credit- (Credit) A loan is a transaction for the transfer of material assets on loan. The concept of a loan, types of loan, registration, conditions and issuance of a loan Contents >>>>>>>>>>>> ... Investor Encyclopedia

Accounting Key concepts Accountant Accounting Trial balance General ledger Debit Cost Double entry Standard methods Cash and cumulative methods RAS / IFRS Financial statements Bu ... Wikipedia

In this article we will look at debit and credit in accounting. Let's find out what debit and credit are. Let's figure out how to determine the debit and credit of an account.

The main terms in accounting are debit and credit, since it is on their basis that all accounting is constructed and all transactions are posted to corresponding accounts. Both debit and credit are inherent in each of the accounts, since through them the main accounting mechanism is implemented - the principle of double entry.

What role do debit and credit play?

Debit and credit are the main account parameters according to which accounting is carried out. It should be noted that both the first and second are characteristics of the same account, that is, they apply to absolutely all accounting accounts. Debit refers to the left side of an account and credit refers to the right side, and their interaction results in the calculation of the balance (or total) of the account.

The main function of debit and credit is to display any economic and financial transaction on accounting accounts, and here two accounts are certainly affected, that is, the principle of double entry is implemented. In other words, if an action is reflected in the debit of one account, then it must also be reflected in the credit of another account.

Account structure and characteristics

Any accounting account is a kind of table divided into two columns - debit (left) and credit (right). The amount for any operation can be assigned either to the right or to the left column, depending on what specific action needs to be reflected.

The total of the account, that is, its balance is also displayed by debit or credit, and is designated debit or credit. Its characteristics are determined by which account the result belongs to.

As for the parameter of accounts, they can be active, active-passive and passive, depending on the category they belong to - assets or liabilities of the company.

• Active accounts are accounts that reflect the movement of an organization’s assets, that is, the placement of funds in the active part of the ledger. balance. For active accounts, the total is displayed in the debit of the account, also the increase is shown in the debit, and the decrease in the credit;
• Passive accounts are used to display the sources of capital formation of the company, as well as obligations to other persons - creditors, the state, individuals. Passive accounts always have a credit balance, reflected in the right column of the account. This balance reflects the amount of funds from which the company’s capital was formed or what obligations it has in conducting its financial and economic activities. The credit of the account reflects its increase, and the debit of the account reflects its decrease. The ending balance will also be a credit balance;
• Active-passive accounts are a rather interesting category of accounts, since, depending on the situation, they can have both a debit and a credit balance. They display both the company’s assets and the sources of its formation.

How to determine the debit and credit of an account

To determine where the account is debited and credited when carrying out any operation, it is necessary to analyze what exactly this action reflects. If it involves an increase in the company’s property, as well as receivables from other persons, then this amount should be debited to a certain account. At the same time, accounts receivable are what is owed to us.

If an action involves an increase in the company’s liabilities or an increase in its authorized (share) capital, then it is displayed on the credit of the account and acts as accounts payable. At the same time, accounts payable are what we owe.

For a more complete understanding and definition of the debit and credit of an account, you should always remember that the debit is on the left side and the credit is on the right side of the account. As for where exactly the amount for the transaction should be attributed, it should be understood that it will be simultaneously reflected in two accounts - the debit of one and the credit of the other. When performing one operation, two actions can be observed at once in two versions:

• growth of the company's assets and reduction of liabilities;
• decrease in company assets and increase in liabilities.

It should be noted that these are not the only options when an active account is correlated with a passive account in correspondence. In practice, there are other transactions, for example, they can be formed from two active accounts - this is subject to the operation recorded in accounting.

Reconciling debits with credits and identifying the result

Note that initially the account may or may not have a balance, and if there is one, it is also used in calculating the final balance. The reduction of debit and credit with the conclusion of the final balance is carried out using a simple mathematical formula, which can be presented in the following form:

S-to con. = C-beginning + Increase – Decrease

Let us derive a formula for calculating the final result for active and passive accounts. It may look like this:

Derivation of the ending balance is not just a mathematical calculation of the total amount. The ending balance is a definite statement indicating the fixation of the result, for example, “at the end of the month, the amount of funds in the bank account amounted to 1 million rubles.”

“Airplane” - a simple form of balance calculation

Almost every accountant knows what they are talking about when they talk about an “airplane” for calculating account balances. This is a simple colloquial name for the scheme that is used to determine the total of an account. Schematically, the “airplane” can be depicted in the following way:

• for active account

• for passive account

By substituting the values ​​into this “airplane” and using the mathematical formulas presented above, you can calculate the ending balance for each account.

Posting examples

The following transactions can be considered as examples of transactions:

• D-t 51 K-t 50 – cash proceeds deposited into the current account;
• D-t 10 K-t 60 – materials received from the supplier;
• D-t 70 K-t 50, 51 – wages were paid through the cash register or sent to salary cards.

Note that in the first example there are two active accounts, and one of them increases and the other decreases. In the second case, the active account 10 “Materials” increases, and the active-passive account 60 “Settlements with suppliers and contractors” also increases. In other words, the amount of materials at the enterprise increases, but the accounts payable to the supplier also increases.

In the third case, passive account 70 “Settlements with personnel for wages” decreases, and cash accounts also decrease. Simply put, wages owed to staff are reduced because money is spent from the cash register or current account.

Special forms of off-balance sheet accounts

In the chart of accounts, there are special accounts, called off-balance sheet accounts, for which the principle of double entry is not used. In other words, they have debits and credits, but they do not correspond with each other or with the main accounting accounts.

Receipts to the account are reflected as a debit, and write-offs as a credit. These accounts are necessary to reflect property that is not the property of the enterprise. They do not participate in the main accounting and are not reflected in the balance sheet, but rather serve to assist the accountant in reflecting specific transactions that are not typical for the organization. These accounts also have an ending balance which is calculated as:

Balance = Beginning balance + turnover according to D-tu – turnover according to K-tu

Due to the fact that these accounts are somewhat special in relation to the main chart of accounts, their balance is always debit and cannot in any way be credit.

An example of making transactions for one account with displaying the balance on it

LLC “Entrepreneur” has a balance of materials at the beginning of the month in the amount of 500 units. in the amount of 500,000 rubles. During the month of May, the company purchased an additional 100 units. in the amount of 100,000 rubles. from the counterparty Spectr LLC, paying for the purchase through a bank account. During the same month, materials were transferred to production in the amount of 300 units. in the amount of 300,000 rubles.

Corresponding entries will be presented in the following form:

• D-t 10 K-t 60 (RUB 100,000) – purchased materials were received from the counterparty;
• D-t 60 K-t 5 (RUB 100,000) – materials paid from a bank account;
• Dt 20 Kt 10 (RUB 300,000) – materials transferred for production;
• D-t 43 K-t 20 (RUB 600,000) – manufactured products are capitalized in the warehouse.

The balance (result) on account 10 “Materials” (active account) for the month of May will be calculated as follows:

Balance = 500,000 + 100,000 – 300,000 = 300,000 rub. However, not all transactions used in this action contain 10 accounts, and therefore they will be reflected in other corresponding accounts.

Debit and credit in accounting: 4 important questions about debit and credit accounts

Question No. 1. How exactly do you understand whether an account is active or passive? If, for example, there is some operation that needs to be reflected in accounting, and the attribution accounts are known, what should be put as a debit and what as a credit?

Answer: In order to decide which account is active or passive, you need to use the chart of accounts, which, as a rule, indicates this characteristic. In addition, you can use standard transactions and, based on them, create correspondence for the operation that needs to be carried out.

The main thing is to understand what kind of operation is being carried out and what it represents, that is, what exactly is decreasing or increasing. Based on this information, you should choose where it will be reflected - on the debit or credit of the account.

Question No. 2. Is the list of off-balance sheet accounts a strictly regulated list or is it possible to somehow adjust it?

Answer: The organization has the right to supplement the list of off-balance sheet accounts if there is an objective need for this. In the main chart of accounts, they cannot be changed; you can only adjust the subconto, that is, further decoding in the context of one account.

Question No. 3. Do you need to use the entire chart of accounts that is available in your accounting?

Answer: The organization has the right to develop a working chart of accounts, which specifically indicates which accounts it will use in accounting for its financial and economic activities. This working chart of accounts must be approved by the head of the enterprise.

Question No. 4. Where in the 1C program can you see “airplane” diagrams for accounts?

Answer: These diagrams are used by the accountant independently as additional assistance in posting information on transactions, and therefore they are not contained in 1C software products. However, the principle that is used in the schemes for calculating the final balance can be observed in various reports, for example, in account cards, balance sheets, payroll statements.

Debit and credit are common concepts used in accounting documentation. With their help, you can analyze the economic condition of the company. Based on these two indicators, specialists monitor the situation, identify profitability, and calculate profits.

All companies doing business are required to maintain accounting records. The only exception is microbusiness. Debit and credit are the basic basis of accounting. If we formulate these concepts in simple words, it turns out that these are the company’s earned and spent funds.

Analysis of the economic stability of the company

Debit is finances that have been earned and credited to the company's accounts. The company received this money for conducting its activities, both core and additional. This could be the provision of services, the sale of goods.

A loan refers to the funds spent, as well as those that are planned to be written off from accounts. This includes costs for material support, employee wages, taxes, insurance premiums, loan payments, and payment of counterparties’ bills.

The favorable economic condition of the company is characterized by the dominance of earned funds over spent ones. In accounting, all states are recorded on the balance sheet in double entry format. The left column contains debit data and the right column indicates credit data.

Entries help:

• track the financial condition of the company;
• record all key indicators of transactions;
• obtain information for calculating profit;
• provide complete information about the company’s activities to potential business partners.

Indicators are designed to summarize a huge amount of information, numbers and data.

Main differences

The concepts of debit and credit have one common function. They are designed to track the financial condition of an enterprise. This is the only thing that unites them. In all other directions these are opposite values.

Debit will indicate the parameters and reasons for the growth of the company's assets. This is an indicator of income from main and additional activities. It is presented as the sum of assets. The loan will differ in that it reflects a decrease in funds on the balance sheet. The indicator displays all expenses.

Important! Debit and credit reflect different processes in the economy, but are intended to provide characteristics of the economic state of the company. It is their correct ratio that will be an indicator of the effective development of the enterprise.

What is debit

Debit in accounting is the entries that must be entered in the left column when filling out the reconciliation report, as well as the balance sheet. In practice, two additional terms are used when working with this concept:

• debit balance at the end of the day;
• balance for a specific period of time.

They are necessary for drawing up the statement. The balance is usually understood as the price of the property, which is taken into account on the balance sheet for the current period.

Existing account types

When recording a debit on a passive account, expenses are indicated that are associated with a decrease in the volume of own funds, with the payment of mandatory contributions and taxes, and with the payment of wages to employees.

What structure

Debit accounts are divided into several sections:

• non-current assets - this includes all information about the company’s assets related to construction and purchases;
• direct - expenses associated with the activities of the enterprise, payment of wages, purchase of consumables;
• indirect - costs of maintaining the functioning of the company;
• productive reserves.

Other Possible Options

The debit structure can be divided into finished products, cash in the company's accounts, equity and borrowed capital.

What is a loan

Credit in accounting is data for which the right column in the statement is reserved. Income and expenses are reflected here in accordance with debit account numbers.

Existing account types

There are main accounts, which reflect the decrease in inventory, and low-moving accounts, which show the replenishment of the remaining funds. In a passive account, you can monitor the receipt of funds as repayment of debts from third parties.

What structure

The loan has the following structure:

• financial resources;
• commercial products;
• production resources;
• settlements, capital;
• funds outside of circulation.

The structure also includes the results of financial activities.

Mixing

In order for debits and credits to be combined, accounting uses two accounts for each business transaction. Funds are received from one of them, and spent from the second. This double entry principle helps to avoid accounting errors. They are discovered when the balance cannot be reconciled.

Errors in accounting are divided into two types:

• deliberate;
• unintentional.

The most common mistakes made are:

• during initial accounting, transactions will be reflected without the corresponding papers;
• funds are not reflected in accounting in a timely manner;
• entries were made incorrectly, which distorted accounting data;
• the rules of primary accounting at the assessment stage were violated.

Errors can occur when computer programs fail or incorrect systems are used. In all cases, the most effective way to find the error is to take an inventory. The actual balance of the company's accounts will be reconciled with the accounting balance. This will help identify instances of incorrect counting. You can carry out reconciliations against counterparties’ invoices by analyzing receipts and expenses.

An accountant may discover incorrect entries when preparing a balance sheet. You can also track the movement of funds through credit and debit accounts. In addition, it is recommended to use the logic control method. With this option, control points are created at which the value in the statement must match.

Debit and credit balance

For any company to operate properly, it requires regular replenishment of its accounts. But at the same time, they are also written off for current expenses. To understand the financial condition of a company, you need to analyze its balance. This concept is relevant for a certain period.

There are several types of balances in accounting:

• debit;
• credit

If debits are higher than credits, the asset column should reflect this difference. This process is called debit balance. In the event that a credit exceeds a debit, this will be shown in the liability column. If the balance is zero, the account is closed.

Important! If we are talking about balances in accounting, then it is not necessary to include all accounts since the operation of the company. The analysis should be carried out only for a certain period. Most often, a month or a quarter is taken. In this regard, the balance can be beginning and ending. The second option displays the cash balance for the remainder of the period, quarter and month.

You can determine the final balance if you add the turnover value to the initial value. If the concept is considered in relation to a specific company, then the balance will be established as the difference between credit and debit. It is calculated based on expense and income transactions.

Credit and debit turnover

Turnover in accounting will mean the amounts that were generated in accounts over a certain period of time. A debit account is an indicator of how a company's assets or property have increased. Turnover will be calculated as the sum of all debit accounts.

Credit turnover shows the totality of all expenditure transactions with funds. When the company is actively operating, receipts and debits from the account occur constantly. Therefore, the company's position in the economic sphere will regularly differ. To obtain up-to-date data, it is necessary to analyze the results for various periods of time. In positive dynamics for a company, the balance should always be greater than zero. If it has a negative value, it will be called credit.

Entries for each account must be made separately. Each transaction with funds is reflected in transactions. Amounts are recorded in columns depending on the type of transaction. The account balance is divided into three types by nature:

• passive;
• active;
• active-passive.

If there is an increase in debit turnover in active and active-passive accounts, this indicates an increase in property. If loan turnover increases, this indicates a decrease in profitability.

In passive accounts, the entire display occurs in reverse. They are created in order to understand where the company received funds from the account. At the end of the period, the turnovers are summed up. This results in the final closing balance. If the debit and credit amounts match, the account is closed. There are a number of accounts that must have a zero balance for the reporting period. These are accounts designed to write off expenses.

Debit and credit in the reconciliation report

A reconciliation report is an extract from a document that displays all financial transactions between counterparties for a certain period of time. That is, this is a document that records all transactions in kind or monetary value on a specified date. Here you can see everything that the company purchased for a week, month or quarter.

Knowing that these are debits and credits in the reconciliation report, you can understand whether the company has debts to partners or not. In the part of the loan act, the receipt of funds from the client is recorded, and in relation to the debit, the completion of obligations to partners for the performance of work and services.

At the legislative level, there is no strict approval of the forms for drawing up the act. The document can be created in any form. It indicates the debit, credit and closing balance indicator. The act is drawn up in two copies. The initiator may be the party who decided to check mutual settlements. One copy is sent to the counterparty, the second remains with the company.

Important! It is thanks to the reconciliation act that it is possible to identify technical errors that lead to the fact that debit and credit may not converge.

Accounting is a very precise process that does not tolerate errors in calculations. Debit and credit are concepts that allow you to control and analyze the company’s position in the economic sphere. Thanks to them, all transactions in the organization’s bank account are reconciled. Every organization should aim to achieve a debit balance, meaning that it spends less than it earns.

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.