Advice 1: What is the turnover of credit and debit

Test your knowledge of accounting has long been invented balance. Balance is balance, a sense that the enterprise is nothing not going away, and assets always equal liabilities. The balance consists of the total turnover on the debit and credit of accounts during the reporting period.
What is the turnover of credit and debit

What is credit and debit



Credit and debit (put the stress always on the first syllable) is a concept used in accounting to monitor business processes of the company. Accounts very much, more than a hundred, they are created in order that would better reflect each operation activity of the company. Each account has its own number and title.

Under the debit refers to all the assets of the company, that is, than it has to date. These can be money in Bank accounts, cash on hand, the total cost of materials in warehouses, the sum of the cost of fixed assets, debt counterparties. The higher the assets of the organization, the more successful and larger than it is.

Liabilities, or the credit turnover is debts and sources of formation of assets. The debts include arrears of wages payable to contractors, depreciation, payable to the founders or owners of the company for the distribution of profits. The sources of formation of assets, for example, its Charter or other capital.

What is the turnover on the debit and credit



The entry for each account is maintained separately. It looks like this: debit in the context of the account is written on the left side and credit on the right. Each operation is reflected in the transaction. A particular account can often be used during the reporting period. The amounts recorded in the columns of debit or credit, depending on transaction type. The nature of the balance accounts are divided into active, passive, active-passive.

Turnover increase in debit active accounts or active-passive means an increase in property of the organization or existence of the rights of the requirement. The increase in turnover of credit, on the contrary, shows their reduction.

In passive accounts transactions are recorded opposite. These accounts are meant to be seen where and by what means in the organization.

At the end of the period, the turnover of debit and credit are totaled separately. It turns out the total balance in the end. If the amount of turnover on the debit and the credit match, the account is closed, as is reset. There are a number of accounts that have a zero balance at the end of the period, this is mainly the accounts that are written off expenses.

The reason for the existence of debit and credit reflects a double entry. The bottom line is a name – double. That is, one operation is necessary to write twice, using two accounts. On the first account the transaction amount is in debit, the second credit, it turns out the balance. So the balance must always come together. If the total turnover of the debit does not converge with a total turnover of loan that admitted an accounting error.

Advice 2: What is the debit and credit

Debit and credit are terms used in accounting. Debit is the left side of the account, derived from the Latin word – "should." Right side of account is called a loan and comes from the Latin "to trust".
What is the debit and credit
Such a designation of the parties of the account historically. They appeared on the stage of development when the entity's accounting was in the reflection of the relationship between the supplier and the debtor, the borrower and the banker.

Currently, these terms have lost their literal meaning. Debit refers to property or property rights of the enterprise, depending on the account facts.

With the term "debit" is the concept of "debit turnover, which includes transactions for a certain period of time, leading to increase in property of the organization or reduction of the source of their formation. The condition of the property, accounted for a score at a particular point in time is called a debit balance.

Credit – opposite side of the accounts required to reflect liabilities (sources of formation of property) of the enterprise. Consequently, credit turnover is a business transaction that lead to an increase in its obligations (liabilities) or decrease in assets.

Thus, business transactions recorded in the account cause increase or decrease of the group of funds for which it is open. And each side of the account intended to separately reflect the increase or decrease amounts. The reflection of economic operations in active accounts (property accounts) debit turnover indicates an increase in specified amounts on it. Debit turnover on the passive accounts (accounts of the organization's liabilities), on the contrary, indicates their reduction. Credit turnover on active accounts indicates a decrease in the disc amounts, and on passive – increase.

The accounts of the two parties due to the need of separate accounting of operations on it (increase and decrease), as well as the convenience of records on the account.
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