main element of doing business accounts is a double entry.Its essence boils down to the interconnected reflection of the same amount of certain economic operations simultaneously on two offsetting entry: one loan and debit another.
Using only two accounts occurs in simple accounting entries.Dual entry may also affect a large number of accounts, in which case the wiring is complicated.Debit and credit determination essentially comes down to the reflection of transactions in money terms, and shows them the direction and the limits of these operations.
To make it easier to understand the definitions of debit and credit, you need to remember that the "debit" comes from the Latin "it should" and "credit" - "I have to."The concept of debit and credit will determine the essence of all the preparation of accounts and transactions.
of accounts is a table with two columns.Debits is reflected in the left side of the accounting, credit, respectively - on the right.
Accounting records are divided into active and passive accounts.Active accounts reflect the placement of funds of the company or bank, and passive - to raise funds.For active accounts, debit means the parish, and passive - flow of funds.Accordingly, credit in the accounts means consumption of passive funds, and active - the parish.
at the expense of the active move from credit to debit.And passive - on the contrary: from debit to credit.
in activity by increasing the debit means an increase in the organization's property.On the other hand, a passive increase in debit accounts fact indicates a decrease of own funds.
Increased loan on active accounts means reducing the value of the assets of the enterprise.If the loan is increased by passive accounts, then the company's own funds increased.
of accounts is a basic concept of accounting language.Debit and credit determination of the key terms appears here.With all the events are recorded accounts of economic life of the enterprise.Recording is carried out in the form of postings.Posting - a reflection of a business transaction or other economic fact on the offsetting entry.
There are two ways to use the Accounts: income and expenditure.Parish means that the amount of money passing through the wiring is added to the account of the company.Consumption means that current account is debited with the amount that is deducted from the amount in the account.
wiring uses two of accounts.Using the double-entry is required.This record is called double entry accounting.
To simplify bookkeeping effect were introduced the concept of "debit" and "credit."In order to determine the essence of the concepts of debit and credit for Dummies, consider the following facts.
terms appeared about 500 years ago.In fact, they were intended to replace a fairly conventional concept of "coming" and "consumption" which, in fact, reflect the very different directions of operations, passing on active and passive accounts.With the advent of "debit" and "credit", it became easier to operate with concepts.In the language of accounting debits came to refer to an increase in assets and a decrease in liabilities.Accordingly, credit reflects the opposite operation: the reduction of the asset and increase liability.
Thus, in the wiring accounts are used with opposite values, one for debit and one - for the loan.To do this you need to know, and debit and credit determination.This characterizes perfectly all kinds of accounts: active, passive and active-passive.
each business transaction results in an increase of the indicator and, consequently, a decrease in the other.For example, the receipt of money from the account in cash is reflected as an increase in the wiring of money at the box office and reduction in the current account for the same amount.Such reflection operations helps control the use of economic resources and proper recordkeeping.Here it is necessary to know the definition of debit and credit, and not to confuse them.
principle of double-entry does not affect the final outcome of the balance sheet and does not violate the equality of the outcome of assets and liabilities.
lead a double record should correctly to ensure correct completion of the accounting cycle works.
