What is debit and credit?

These are accountancy term. If any amount come to your account then it is debit. Such as Income, asset, bill receive able etc. If any amount goes from your account then it is credit. Such as expenses, liability, outstanding bill.

Debit & Credit entries are various accounting systems.

Credit accounts are revenue; equity & liabilities.

Debit accounts are assets & expenses.

This means you credit accouunt to increase their balances & you debit account to increase their balances.

This also means you debit your savings account every time you deposit money in it & the account is normally in deficit. You credit your credit card a/c every time you spend money from it & the account is normally in credit.

However if you read your bank statement, it will say the opposite that you have credited your account when you deposit money & you debit when you withdraw. If you have cash in your account, you have positive or credit balance & if you are overdrawn it will say you have a negative or a debit balance.

The reason for this is coz the bank, and not you, has produced the statement. Your savings is your asset but a liability to the bank.

The primary difference between debit and credit is in the way that the transactions are processed. When you run your bank card as a debit card, you will be asked to enter a personal identity number (PIN), and the funds are removed from your account instantly. When you select a credit option, the transaction is verified with your signature, and the funds may not be removed from your account right away, depending on how the store processes its credit card transactions. Many do what is known as “batching,” meaning that all of the credit transactions are run in a batch, typically at the end of the day, and it may take several days for your credit transaction to clear.

From the point of view of the merchant, the difference between debit and credit is typically a fee. Smaller companies may be charged less by the companies which process their card transactions for running cards as debits, so if you are visiting a small, locally owned business, you may want to consider selecting the debit option as a courtesy. In both cases, the store will get the money for the transaction, so both credit and debit transactions are protected from that point of view. This difference between debit and credit may not be important to you, and it doesn't apply to all merchants, as some stores negotiate deals with equal fees for debit and credit.

For you, the difference between debit and credit is actually quite significant. Typically debit transactions have a daily limit, for example, so if you are making a large purchase, it may not go through when you try to use your card as a debit card. In addition, banks handle disputes involving debit and credit transactions differently.

When you use a bank card as a credit card, you are protected from liability by the same laws which protect credit card users. If someone steals your card and you report it, you will not be liable for their credit transactions, for example. You can also take advantage of the credit card company's mediation process to handle any merchant disputes you may have.

When you run a bank card as a debit card, you are potentially less protected than if you run it as a credit card. If your card is stolen and you report it promptly, for example, you may not be held liable for transactions, but if more than a few days elapses, you may find yourself forced to pay these charges. You must also use the bank to mediate disputes with merchants, which can result in varying degrees of success, depending on your bank.

for accounting, a debit is an increase in an ASSET, or a decreae in LIABILITIES and SHAREHODLERS EQUITY, or a decrease in REVENUE, or an increase in EXPENSES, while a credit is the reverse of the above accounts. For example,

SALE OF GOODS FOR $100

Dr. cash $100

Cr Revenue $100

BUY OFFICE SUPPLIES ON CREDIT, $50

Dr. Office supplies expense $50

Cr Accts payable $50

for your deposit book with bank, a debit is a charge (decrease of your bank balance),while a credit is an increase (deposit) of your balance.

what comes in is debit and what goes out is credit...

what comes in is debit and what goes out is credit...

debit card = cash

Credit card = debt

simple as that!