Answer Posted / bhavani
In Accounting Debit means Indebted by and Credit means
Indebted to. Debit & Credit are the basic rules of
accounting and it applies to every transaction having
monetary implication. The basic point one needs to remember
is, in every transaction total of debits equal to total of
credits. Source of Debit & Credit in Book keeping is
transaction voucher and the destination is the period end
Financial Statements, i.e. Profit & loss A/c (or Income &
Expenditure A/c) and Balance Sheet.
In the Profit & Loss A/c, all incomes are credits & all
expenses are debits. In the Balance Sheet, All assets are
Debit and All liabilities and Networth (Capital & Reserves)
are credits
| Is This Answer Correct ? | 2 Yes | 7 No |
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