debit and credit

by james
(accra-ghana)

What is debit and credit?

Answer

In accounting, accounts are set up to look like a “T”. In a “T” account – amounts entered on the debit side (left hand side of the T account) are called debits and amounts on the credit side (right-hand side) are called credits.

To debit means to make an entity in the left-hand side of an account and To credit means to make an entry in the right-hand side of an account.

Important point! The words debit and credit have no other meaning in accounting. Most people think a debit and credit as a positive or a negative. They are not either.

See this page on basic accounting for more on debits and credits.