The expression “reduce debit to credit” is probably familiar to everyone. At the same time, many do not even roughly understand what this means. Therefore, below we will try to explain as simply as possible what debit and credit are.
Why did you come up with accounting? In order to take into account the property of the enterprise, its liabilities, capital and in general all of its activities.
Imagine if we counted goods in pieces, gasoline in liters, and money in rubles, it’s not clear how to put it all together? How to understand whether the company makes a profit or loss, how much goods are left in the warehouse and how much money is in the current account?
Therefore, all transactions, whether it is the receipt of amounts to the company's accounts, the write-off of material assets or settlements with suppliers, are recorded in accounting in monetary terms.
The main rule of accounting is the principle of preservation of value. Its essence is that if some property “came”, then the same amount should “leave”. Or vice versa - when writing off a certain amount, you must definitely receive something in return and write it down in the parish.
What we talked about above is called the double entry principle. That is, any action in the organization should have 2 operations - incoming and outgoing.
To make it easier to keep such records, the concepts of "debit" and "credit" were introduced. Thus, each account is divided into two halves: debit is the receipt, and the expense is credit, the left and right columns of the account, respectively.
To make it clearer, imagine that you go to a store, take out of your wallet (let's call it Cashier) 2,000 rubles and buy a dress. In this case, the amount is withdrawn from the credit of the Cashier account and goes to the debit of the Shop account. To reflect this in accounting, you need to take both of these accounts and write down 2,000 rubles 2 times:
Please note that the value always goes from the credit of the account, but goes to the debit. This transfer of value is called double posting.
To understand what a balance is, let's look again at a simple example.
So, you have decided to open a retail outlet for the sale of greenhouses. It was in the fall. At the same time, to make it easier for us, your organization has neither money, nor debts, nor even the greenhouses themselves. But then there is already a buyer who wants to buy three greenhouses from you for a total of 100,000 rubles and leave them (greenhouses) with you for storage until spring.
On this, the first month of your work is over and it's time to take stock.
For the "Buyer's wallet" account, the credit turnover was 100,000 rubles, and the debit turnover was 0.
Cashier: debit turnover - 100,000 rubles, credit - 90,000 rubles.
"P / c in the bank": debit turnover - 90,000 rubles, credit - 80,000 rubles.
"Supplier": debit turnover - 80,000 rubles, credit - 160,000 rubles.
"Warehouse": debit turnover - 160,000 rubles, credit - 0.
Now it remains to withdraw the balance, which turned out to be for all accounts. This value will be referred to as the "Final Balance". To calculate the balance, you need to minus the smaller one from the larger turnover.
Consider, for example, "P / s in the bank". The turnover on a debit is 90,000 rubles, and on a loan - 80,000. The first amount is greater, which means that the balance is in debit: 90,000-80,000 = 10,000 rubles. Let's write it down in the debit part of the account and enclose it in a red rectangle.
Now pay attention to the Supplier account: here the debit balance is 80,000 rubles, and the credit balance is 160,000. In this case, the balance turned out to be credit: 80,000 - 160,000 = 80,000 rubles (also in the red rectangle).
We do the same with the rest of the accounts. As a result, we get the following result:
Let's look at what the balance means for each of these five accounts.
There is a credit balance on the account "Buyer's wallet" and it reminds you that in the spring you have to give the buyer of the greenhouse in the amount of 100,000 rubles.
The balance on the Cashier account is in debit. It means that there are 10,000 rubles in the cash desk of your organization.
The debit balance on the third account shows that you have another 10,000 rubles in your bank account.
The fourth account has a credit balance that will not let you forget that you owe the manufacturer 80,000 rubles.
Well, the last invoice with a debit balance says that there are greenhouses in your warehouse in the amount of 160,000 rubles.
You continue to work, and the balance sheet should reflect subsequent operations. But first, it is necessary to transfer the final balances of the previous period to the beginning of the new one. Such balances will be called incoming, they must be recorded in the appropriate column: debit balance - on the left, credit - on the right.
Let's go back to the example. You have decided to transfer another 7,000 rubles from the cash desk to your current account. Two accounts are involved. First, do not forget to transfer the incoming balances along them (in the figure below they are circled in green), then we write the posting to 7,000 (in CT "Cashier" and in Dt "R / s").
No further action was taken on the accounts during this period.
At the end of the 2nd month, we first calculate the turnovers, while we do not pay attention to the incoming balance (turnovers are circled in blue). Then we calculate the final balance (in the red rectangle), already taking into account the opening balance. The following picture turns out:
Of course, these are pretty primitive examples. In fact, in accounting, everything is much more complicated. But it is quite possible to get basic concepts of what debit, credit and balance are from this article.
Greetings, dear blog readers. Recently, one of my subscribers suggested that I consider in an article the balance sheet for people who are not accountants, but who need to understand the basic information from this register. Also, the article will be useful for a novice accountant and those who are studying this profession.
In this article, we will consider the turnover sheet itself, what it consists of (its structure), we will briefly analyze the basic concepts of accounting, without which it is difficult to understand the turnover, we will understand how to draw up a turnover sheet, and also consider the most common accounts: account 10, account 20, 41, 43, 60, 62 and 70.
Let's start with the definition. Revolving - balance sheet, they also say revolving sheet or turnover - this is an accounting register, which reflects balances and turnovers (operations) for all accounts.
Previously, the balance sheet was compiled on the turnover sheet. If you studied to be an accountant, economist and other specialties where accounting is studied, you probably know the so-called cross-cutting tasks, when you need to draw up transactions, calculate account balances, draw up a balance sheet, and draw up a balance sheet on it.
Now, most often, the balance is drawn up in the program and the turnover sheet is needed to see the turnovers and account balances, and to reconcile the amounts if something does not fit in the balance sheet.
Here is an example of the balance sheet from the 1C Accounting 8 program.
It has the following columns. Account number, account name (sometimes the account name is skipped and only its number is given), then the balance (balance) at the beginning of the period (if the turnover is made up for a month, then the balance at the beginning of the month), monthly turnover and the balance (balance) at the end of the period ...
Now, I think, it is clear where the name of this register comes from. Because it contains the balances, in accounting terms - the balance and turnover for the period.
The columns with the balance and turnover, in turn, are divided into two parts: debit and credit.
These are the two parts of the account.
Please note that the amounts for debit and credit for balances must be equal to each other, the same is in terms of turnover.
Accounts are the foundation of accounting. With their help, all operations of the enterprise are reflected. Account numbers and names can be viewed in the chart of accounts. All commercial organizations use the chart of accounts dated October 31, 2000, which has been in effect since 2001.
All accounts can be divided into two groups: active and passive.
Active accounts are accounts on which the property of the organization is recorded, that is, fixed assets, materials, goods, cash, etc.
In a schematic form, the invoice can be presented in the form of a table, consisting of two parts, debit left and credit on right. Abbreviated debit means Dt, and credit - CT.
The balance of the account at the beginning or end of the period is called "balance".
The amount of transactions for the reporting period is called the account turnover. The account can have two turnovers - debit turnover (Ob d) and credit (About k).
Active account scheme
In an active account, the balance at the beginning and at the end of the period can only be in debit.
Example:
The balance on account 51 "Settlement accounts" at the beginning of the month is 20,000 rubles. Within a month, money was received to the current account in the amount of 60,000 and 70,000 rubles and was transferred from the current account in the amount of 40,000 and 50,000 rubles. Determine the balance of account 51 at the end of the month.
Let's draw a diagram of account 51:
| D-t | K-t |
| From n - 20,000 rubles. | |
| 60 000 | 40 000 |
| 70 000 | 50 000 |
| Ob d - 130,000 | About k - 90,000 |
| C k = 20,000 + 130,000 - 90,000 = 60,000 |
Passive accounts are accounts of the sources of formation of property, that is, through which this property is acquired. Sources can be own or borrowed.
Own - this is the authorized capital, retained earnings, etc. Borrowed - credits and loans.
Passive account scheme
In a passive account, the balance at the beginning and at the end of the period can only be on the loan
Example:
The balance on account 80 "Authorized capital" at the beginning of the month is 10,000 rubles. Within a month, the founders made contributions in the amount of 40,000 and 60,000 rubles and the capital was reduced due to the release of the founders in the amount of 20,000 and 30,000 rubles. Determine the balance of account 80 at the end of the month.
Let's draw the account scheme 80:
| D-t | K-t |
| S n - 10,000 rubles. | |
| 20 000 | 40 000 |
| 30 000 | 60 000 |
| Ob d - 50,000 | About k - 100,000 |
| C k = 10,000 + 100,000 - 50,000 = 60,000 |
The data comes into circulation from the accounting accounts. Let's compose a register using the example of 51 and 80 accounts discussed above.
We will write the balance at the beginning of the month on account 51 in the Balance at the beginning column by Dt. We write down the turnovers in the "Turnovers" column for debit and credit. End balance in the column End balance by Dt.
On the score 80 will be a little the opposite. We write the balance at the beginning of the month in the Balance at the beginning column by CT. We write down the turnovers in the "Turnovers" column for debit and credit. Balance at the end in the column Balance at the end by CT.
Please note that the turnovers on the account are recorded both in the debit and credit columns. But the balances (balance) can be either debit or credit.
This account is active, and it reflects all the materials that the company has. For example, in a furniture manufacturing plant, the materials will be boards, upholstery fabric, etc. At a sewing enterprise: fabric, buttons, threads.
Also, materials are stationery, gasoline and others.
Since this account is active, the balance at the beginning of it will be in debit. It means how many materials are in stock at the beginning of the period. The debit turnover shows how many materials were received by the company during the period. And on the loan - how many materials were written off. This account will always have a debit balance at the end of the period.
If suddenly the balance is obtained on the loan (if you keep records in the program, there this amount is shown in the debit, but in red and with a minus), this means an error. That is, more materials were written off than they actually are.
These accounts, like account 10, are active and they will have a similar structure in circulation.
Goods are what the business buys or resells.
Finished products are what the company manufactures. For example, furniture, clothing, etc.
The balance at the beginning of the period is always in debit and means how many goods or finished goods are at the beginning of the period in the warehouse. Debit turnover shows how many goods arrived at the enterprise during the period or how many finished goods were manufactured. And on a loan - how many goods and finished products were sold. This account will always have a debit balance at the end of the period. A negative balance means an error.
This account collects the cost of finished products or services at the enterprise. For example, if the company is engaged in sewing clothes, this account reflects all the costs associated with this. Materials (fabric, buttons, threads, etc.), seamstresses' wages and deductions, depreciation of sewing equipment, rent and utilities and other expenses.
Account 20 is active. The balance at the beginning of the period is always in debit and means the balance of work in progress at the beginning of the period. For example, for a sewing enterprise, these will be unfinished and unfinished items.
The debit turnover shows the expenses of the company associated with the manufacture of products or the provision of services. And on the loan, write-off of expenses upon receipt of products at the warehouse or the provision of services. This account will always have a debit balance at the end of the period. A negative balance means an error. Just such an option is shown in the picture. On the loan, the costs are written off, but on the debit, there is nothing. Therefore, the balance is shown in red and signals an error.
This account is intended for the accounting of settlements with suppliers who supply the company with materials, goods or services.
And here we will come across one more type of accounts - active-passive. The difference between these accounts is that they can have a balance both in debit and in credit.
Otherwise, they retain the structure or active structure (operations that increase the account are shown on debit, and those that decrease on credit) or passive (on the contrary, operations that reduce the account are shown on debit, and increase operations on credit).
Account 60 refers to active-passive accounts with a passive structure. This means that the debit will show a decrease in our debt to the supplier, and the loan will increase. The credit balance of the account shows that we owe the supplier a certain amount.
And if the balance is debit, it means that the supplier owes our company. This may be the case if we have transferred an advance payment to the supplier, but the supplier has not yet provided materials, goods or services.
This account is used for settlements with buyers. It is also active-passive, but with an active structure. That is, the debit of the account shows an increase in the debt of buyers to our company, and a decrease in the loan.
The debit balance of the account shows that the buyer owes our company a certain amount.
And if the balance is on the loan, it means that our company owes the buyer. This can happen if we have received an advance payment from him, and the goods, finished products or services have not yet been provided.
And finally, account 70. This account takes into account settlements with the personnel of the organization.
Account 70 refers to active-passive accounts with a passive structure. The debit shows the decrease in our debt to the staff, and the increase in the loan. The credit balance of the account shows that we owe the employees a certain amount.
And if the balance is debit, it means that the employees owe our company. This can be the case if the company, for example, transfers advances to employees.
I hope this article helped you figure out what the balance sheet shows. The material turned out to be very voluminous, so if something is not clear or there are other questions, for example, on other accounts, ask them in the comments.
If you need individual training, consultations and other services for working with 1C, take a look at the section
For more information about what the balance sheet shows, see the video:
Debit - the term comes from the Latin word debet with the literal meaning "he must". The broadest value of the debit is the withdrawal of funds from the client's account. In modern accounting, it represents the left side of a bilateral account.
Designed for registration of cash accounting and any movement of funds, material values and other assets of the company.
An increase in the debit occurs with an increase in material resources, property of the company. Nuance: in passive accounts, credit is an income, and debit is an expense; for active accounts, the opposite is true: debit is a receipt, and credit is an expense. In other words, the debit is intended to evaluate the monetary funds accounted for: the debit takes into account the presence of material assets at the beginning of the month, the beginning of the year and their further receipt during the next period (also a month or a year). Financially, a debit means an amount payable or receivable to a legal entity or individual.
Accounts receivable - represents the total amount of debts of this company from other individuals and legal entities that are debtors in this situation. The active settlement accounts reflect the debt of debits at the beginning of a specific period (month, year), as well as its further increase. Passive checking accounts reflect the repayment of debts to creditors.
The debit balance is an assessment of the condition of the property or the property rights of the company. Both are reflected in the account, representing the debit balance at a particular moment.
Debit turnover is a business transaction, the result of which is an increase in material values, property or property rights. Also, the debit turnover assesses the decrease in the company's debt reflected in this account.
Debit balance is assessed as of a certain date, debit turnover - assesses the process for a certain period of time.
The article tells what credit and debit are in accounting, why active and passive accounts are needed, and provides a clear example of calculation.
Financial issues are always surprising to those who do not face them on a daily basis. Credit, debit and other professional terminology is not easy to understand. Especially among novice businessmen who, when submitting tax reports, grab their heads and ask: "What is debit and credit?" This article will discuss these concepts in simple terms.
It so happened historically that all financial and business transactions are reflected using a binary notation. This is done in order to understand what assets the business has and how they were obtained. Thus, you can assess the effectiveness of doing business and make the right strategic decisions.
A record of any action carried out in a business is recorded in the transaction log using its essence and two numbers that it corresponds to in the so-called chart of accounts - grouping depending on the purpose of the transaction. For example, if we issued wages from a current account, then at the same time this fact is reflected in two columns at once, where the debit account is the left side of the statement, where settlements with personnel are reflected, and the credit account is the right side from where these funds were deducted. With the assignment of the necessary digital designations, respectively. As a result, it gives an understanding of where the funds came from and where they went, and in a broader sense - what credit and debit are in accounting.
As already described above, a binary notation is needed in order to understand the origin of assets and the appropriateness of their use. What the company has, including someone else's debt to it, is reflected in debit accounts. Debit is the leftmost column in the statements. Here fixed assets are accumulated, all property is taken into account, as well as profit.
To understand how the receipt of the property that the company has is achieved, the concept of a credit account is used. Credit is the right column of the statement. It shows how much the company owes, how the funds are allocated, what brings the main profit. In simple terms, this is the expense of assets that are located in debit.
Due to the fact that when calculating the financial result, the binary record of the operation is used, you can easily say in what favor it went. For example, if we withdraw money from the cash register and send it to the current account, then in the language of accounting we write off these funds from the loan and write them down on debit. There can be a large number of such transactions per month, therefore, certain statistics are carried out based on the results of the reporting period. From the amount that came to the debit, the one that left is deducted. This is called debit turnover. The same goes for a loan. Thus, we can trace the movement of values down to the operation and make the right management decision.
After we have counted all the revolutions, it is necessary to identify the difference between the higher and lower numbers. If the debit figure turned out to be more, then the balance, that is, the balance between the receipt and the expense for the period, is debit. This allows us to understand in what favor the reporting period has passed and allows us to adjust income and expenses to derive the final balance sheet.
Accounting also divides all accounts into two types: active and passive. The first are funds in cash equivalent that the company possesses. The opening and closing balances of these accounts are always in debit. The latter always show the change in the sources of the company's assets. Accordingly, the balance at the beginning and end of the period is always credit. They always show the total debt to banks and counterparties, depreciation charges and a decrease or increase in capital. Thus, we can say that the debit account is active, and the credit account is passive.
To clearly understand what credit and debit are, consider a simple example.
Suppose you decided to open a clothing store and sold your first order for 5,000 rubles. Part of the amount, 2,000 rubles, was decided to be deposited into a bank account. What came is counted in the "Debit" column, and what went out is credited. In the statement, this operation will look like this:
Cashier (account 50):
Customer (account 62):
It's time to take stock of the first month of work. We consider the amounts of debit and credit turnover (those that have accumulated on the corresponding accounts).
Cashbox: 5000 - 2000 = 3000 rubles. The first amount is greater, therefore, it is recorded in the debit part as a result.
Checking account: 2000 - 1000 = 1000 rubles - the same thing.
Customer: 1000 - 4000 = 3000 rubles - here the situation is the opposite, that is, the second figure is larger. Accordingly, it goes to the right side of the column - on credit.
Warehouse: 4000 rubles.
Thus, the debit balance makes it clear what assets we have at the moment, and the credit balance does not allow us to forget that we owe the supplier part of the funds for the order.
In the next reporting period, we transfer all the data that was obtained as a result of the work. This will be called the opening balance.
Of course, the example considered is rather primitive, and the titles of the articles are conditional. However, it clearly shows what the terms "credit", "debit" mean, how they are interrelated and how the turnover between them takes place. Of course, accounting is a more complex and time-consuming process.
Everyone is familiar with the expression "balance debit with credit". But for many it remains a mystery what these concepts mean. Therefore, in this article, we will consider what debit and credit are, as well as credit and debit turnovers.
With the help of accounting, an analysis of the activities of an enterprise is carried out, its property, capital, and liabilities are taken into account. It is easy to see if a business is profitable or unprofitable. Therefore, when money is received, material assets are written off or there is a settlement with suppliers, this is recorded in accounting in monetary terms.
The main rule of accounting is the following - how much has come, the same amount must go. It is also called the principle of conservation of value.
Debit and credit are concepts used in accounting to analyze all the processes of an enterprise. There are many accounts, and all of them have been created to reflect business transactions. Each of the accounts has its own name and number.
So let's make a comparison between debit and credit turnovers.
Debit represents all available assets that are owned by the organization. That is, this is the property that the company has at the moment. Property can be understood as:
Accordingly, the more assets the company has, the more successful it is considered. The source of assets formation can be the authorized capital.
Debit turnover is the total amount of all credit transactions reflected in debit. Credit turnover is the sum of all expense transactions reflected in the credit. At the same time, you need to understand that we are talking about an active account. If the account is passive, then the situation is reversed. Receipt transactions are displayed by credit, expense transactions, respectively, by debit. 
Liabilities are all the debts of the organization. These include:
Accounting is carried out for each account separately. Debit is shown on the left and credit is shown in the column on the right. Each operation must be necessarily reflected. Some accounts are used quite often throughout the reporting period. The debit columns should reflect the amounts that characterize each transaction separately. Accounts are conventionally divided depending on the balance: they can be active (account 51 "Settlement account"), passive (account 86 "Reserve capital"), as well as active-passive (account 76 "Settlements with debtors and creditors").
If the property of the enterprise increases or rights of claim arise, then the debit turnover increases on active and active-passive accounts. Conversely, if the property decreases, then there is an increase in credit turnover.
Business transactions on passive accounts are displayed inversely. Basically, these accounts are used to see where the funds came from for the company. 
At the end of each reporting period, all debit and credit turnovers must be summed up separately. As a result, the final balance is formed. In the event that there is a complete coincidence in the amounts in the debit and credit turnovers on the account, then the account can be closed. There are some accounts that automatically have a zero balance at the end of the period. As a rule, these are accounts to which expenses are written off.
In order to calculate the balance of funds on the current account, debit the volume of debit turnover (the amount of funds received) the volume of credit turnover (this is the amount of funds spent). The incoming balance must be added. It is on active accounts.
If the account is passive, then to determine the final balance, add the credit turnover (this is the amount of funds received) and subtract the debit one (this is the amount of funds spent). In active-passive accounts, the debit and credit balance is determined according to analytical accounting data. 
The concepts of credit and debit are reflected in the so-called double entry. That is, it is assumed that each business transaction must be recorded using two accounts. It turns out that on one account the cost of the operation goes into debit, and on the second - on credit. As a result, balance should be formed. That is, the balance must come together every time. In the event that a situation arises in which the total debit turnover does not overlap the total credit turnover, then it can be concluded that an accounting error was made in the accounting of transactions.
One of the most important indicators of the organization's activity is the credit turnover on the current account. This term is equally often used not only by accountants, but also by bankers and auditors. Unfortunately, private entrepreneurs and business start-ups do not fully understand the essence of its content. 
Depending on the purpose for which the accounts are used, they are divided into the following types:
Actually, regardless of the type of account, they all display only two types of operations:
The entire set of transactions made on the account for a specific time period (day, month, year), as well as reflected in the bank statement, represents the general concept of turnover on the current account. Such an account can be conditionally divided into two parts:
At first glance, everything is obvious. However, everything is so simple only until the moment when the owner of the bank account receives the bank statement for the first time. It shows that the tax payment operation is displayed on a debit, the receipt of funds as material assistance from the founder is displayed on a loan. Among other things, the bank statement displays a negative account balance at the end of the banking day.
It is important to remember that a bank statement is essentially an accounting document of the bank, and not of the owner of the current account. It turns out that since the bank takes third-party funds into temporary possession, then, formally, it is the debtor of its client. And the receipts of funds to the current account, respectively, increase the amount of his debt. But the deduction of funds from the bank account just reduces the bank's debt to its client. 
What can be the transactions on the current account?
The cleared turnovers of the current account are:
An indicator of the effectiveness of the organization, as well as an index of financial well-being.
A concept used in accounting slang. That is, it is not used in legislation, does not appear in contracts.
If you do not go deeply into financial and accounting terminology, then you can take it as a rule that the turnover on the current account is the activity index, and the net turnover is the index of the organization's success. That is why the second category is often used:
Actually, the turnover on the current account can be defined as the discrepancy between the debit and credit turnover of funds and their actual expenditure for a certain period. However, it is worth noting that when calculating the cleared turnovers on the account, not all receipt transactions can be taken into account, but only those that are directly related to the implementation of the enterprise's activities. 
Transactions that are not subject to accounting include:
Thus, from this article we learned what debit and credit are, how transactions are recorded. We also considered the concepts of debit and credit turnover for the reporting period.
