Learning Accounting and Bookkeeping Basics
This article will help you understand an important distinction in accounting and bookkeeping - the difference between a credit and debit.
When you deposit money in the bank, the cashier will tell you "I'll credit your account." From that experience, most people assume that cash is a credit, and so credits are good. That is further reinforced when reductions in the accounts are referred to as debits. Besides, if you remove the "i" "debt." So, debits seem bad.
Unfortunately, the conditioning we receive at the bank is causing real confusion in the accounting class. Why? Because in accounting we understand that the bank account is a debit account, and that debts are credit accounts - the opposite of what most people expect. That is why your checking account card it referred to as a debit card.
In fact, debits and credits are neither good nor bad. Each transaction, whether it be a good transaction (deposits), or a bad transaction (bills) has both a debit and an equal credit. That's why they call it "double-entry accounting." When the cashier is telling you he or she will "credit your account", they are also entering a debit for the same amount that they are not telling you about. The same is true for the debits to your account - there is also a credit being made at the same time.
I find the best way to understand debits and credits is to identify the two components of each transaction.
Universal Accounting® is a Accounting School that can teach you how to understand the components of each accounting transaction. The Professional Bookkeepers Course from Universal's is a home study video course perfect for brushing up on your accounting knowledge or starting your own business as an Accountant or Bookkeeping professional. Debits and Credits are only the start of some of the things you will learn with this training.
Take our Accounting Quiz to test your knowledge and see what you will learn in our Professional Bookkeeper™ Course.
The Professional Bookkeeper™ Course also makes it easy with examples, graphics, photos, and illustrations. For instance for Debits and Credits examples would be given like this:
This is only one of the hundreds of topics we cover in our Professional Bookkeeper™ Course
This training will even prepare you guide you through how to start your own Accounting and Bookkeeping Business and make $30-40 an hour.
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