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Learning Accounting: Debit and Credit Basics
However, what weÂ've learned about these two words so important in the accounting world, debit and credit, have to be unlearned quickly. Why? Because in accounting, the term debit is used to describe a bank account and that money owed are actually credit accounts – the exact opposite of what weÂ've been taught elsewhere.
In accounting terms, neither credits nor debits are ‘badÂ', but they need to equal each other in order to balance themselves out in the end. Every itemized transaction, no matter if itÂ's a deposit or a bill to be paid has both a debit and credit posted in the accounting world. This is what is called ‘double-entry accountingÂ' – so when you go to the bank, and the tel...
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