Key Differences Between Debit and Credit in Accounting The credit balance is when the total credits are more than the total debits in each account.Īlso Read: Difference Between Accounting and Accountancy incomes and gains accounts, and liability accounts have a credit balance. Therefore, we enter these transactions on the right-hand side of the account, which means that these items are credited. The verb ‘to credit’ means to post an entry on the right side of an account. Also, we affix the word ‘ By‘ to the name of the account recorded on the credit side. In the particulars column on the credit side, we enter the account’s name to which benefit is given. It indicates the source which sacrifices for the benefit. Hence, it implies ‘what we will have to pay. It refers ‘to trust’ or ‘belief’ (in the proprietor or owed by the proprietor). The word ‘credit’ comes from the Italian term ‘ credito‘ which originates from Latin word ‘ credo‘. This means that the total debits are more than the total credits in each account.Īlso Read: Difference Between Journal and Ledger So, asset and expense accounts have a debit balance.
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