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The Shocking Revelation of Credit And Debit Meaning | credit and debit meaning

The term credit and debit meaning is very widely used in South India. This simply means a certain type of transaction that includes debit or payment of a certain amount to the seller. For example, a grocery store credit card would give you the privilege to make purchases under a specified credit limit. A credit card given by a hotel would give you the privilege to make purchases under a certain credit limit during your stay in that hotel.

In the Indian context credit and debit are generally used for financial transactions. A bank in India has both debit and credit sides and these are known as the debit side and the credit side in banking. So a person can transfer money from one account to another with the help of an ATM machine or through a cheque. Similarly you can withdraw cash from an ATM in an instant manner.

Credit and debit are also used in the field of accounting. Accounting is not limited to bookkeeping only but also in various other fields like market research, auditing etc. A market research company generally has its own accounting department along with its finance department and management. These departments create the accounts keeping records of the different transactions of the company. Similarly, a bank has its own department for providing the services related to accounting and these companies hire professionals to do the job for them.

On the debit side we have a credit side and on the credit side there is a debit credit accounting system. A debit credit accounting system has two main parts namely a master account and a debit account. In the master account an account holder will have all his or her transactions details like the time of transaction, amount transferred, from where the amount was transferred and to whom it was transferred. On the debit side there is a bank account that is named in the statement of credit and debits. This account name is given by the bank so that they can easily recognize who made the payment and when.

The debit part means that these accounts do not have any asset account linked with it. So the debit accounts balance does not get added to the balance of the asset account. Debits are also known as income. The difference between credit and debit is that debits have nothing to do with accounts receivable and accounts payable. So debit transactions are considered as a normal expense account while the credit transactions on the other hand are considered as an expense account.

There are many other terms that are used in accounting to describe the same concepts. A receivable is a debt that would need to be paid back to the seller of the goods sold. It is the pre-sale document that assures the seller that the buyer of their goods has already purchased them. So the money received from debits would go as settlement fee. Now if you have an asset account that is not active then the money received from debits would go to an active account.

Equity account means the stocks, shares, bonds or other secured assets. An equity account would have a series of bank accounts that have debits and credits. Debits are the money that the sellers pay out to the buyers of the securities and the credits are the money that the buyers pay back to the sellers. So the debit on the securities account would result in debits and the debit on the stock account would result in credits.

Credit and debit meaning is very important to understand the financial side of an enterprise. There are many other technicalities involved but having a basic knowledge of the debit and credits in accounting can make a huge difference in the way that one handles their business. So make sure that you get all your accounting works through a company that has a good reputation for handling accounting transactions.


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