Credit denotes the right side of the account.
If we analyze the golden rules of accounting we will find the definition of debit and credit. If the amounts of the credit exceed the debits, the account will show a credit balance. When comparing two sides, a debit balance is displayed in an account if the total amounts of the debit exceed the credits. Crediting the account is an entry on the right side.
In the recording process, we frequently use the terms debit and credit to describe where accounts are entered.įor example, debiting an account is called the act of entering an amount on the left side of an account. It does not mean, as is generally thought, increase or decrease. The term debit shows the left side of the account and the credit shows the right. Now we try to understand what is Debit? And what is Credit? There are two or more accounts in every transaction in accounting.
