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what is meant by credit?

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yaropolkyaro
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what is meant by credit?  Reply with quote  

what is meant by credit?
Post Mon Oct 24, 2011 1:23 pm
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payment proof
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1. A contractual agreement in which a borrower receives something of value now and agrees to repay the lender at some later date. When a consumer purchases something using a credit card, they are buying on credit (receiving the item at that time, and paying back the credit card company month by month). Any time when an individual finances something with a loan (such as an automobile or a house), they are using credit in that situation as well.

2. The borrowing capacity of an individual or company.

3. A journal entry recording an increase in assets. With cash basis accounting, credits are recorded when income is received. With accrual basis accounting, credits are recorded and recognized when income is earned. Compare to Debit.

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Post Wed Oct 26, 2011 10:16 pm
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soybean
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quote:
Originally posted by payment proof

3. A journal entry recording an increase in assets. With cash basis accounting, credits are recorded when income is received. With accrual basis accounting, credits are recorded and recognized when income is earned.
I agree with everything you on points 1 and 2 but not on point #3. You are incorrect there. In accounting, debits represent increases in asset and expense accounts while credit journal entries indicate increases in liability, equity, and income accounts.

I'm surprised no one corrected you before now. Apparently, not many accountants visit this forum. Wink
Post Fri Nov 11, 2011 7:49 pm
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ting231
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Can explain clearly?
Post Tue Nov 22, 2011 3:12 pm
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JamesAshworth
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Credit is a term of Bookkeeping in Accounting. Every one Show there liability as credit.
Post Tue Nov 29, 2011 5:11 am
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james_kellen21
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Borow some money or some thing from others is called credit.
Post Tue Jan 03, 2012 11:10 am
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ricky220
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quote:
Originally posted by james_kellen21
Borow some money or some thing from others is called credit.


In short it is the best definition.
Post Thu Jan 12, 2012 6:26 am
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meldrum2011
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There is no any logic in accounting that means debit and credit. I learn from my accounting teacher, he said this and they are using this word like T shape I mean left side and right side, which is debit and credit. Thanks all....
Post Sat Jan 14, 2012 8:39 am
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abbysmith899
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credit is an accounting entry that either decreases assets or increases
liabilities and equity on the company's balance sheet.
Post Sat Jan 21, 2012 5:20 pm
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Destiny
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Credit is a term used in commerce and finance, to denote transactions involving the transfer of money or other property on promise of repayment usually at a fixed future date.
Post Fri Feb 03, 2012 5:27 am
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harrymonk40
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credit is used in financel,to take money from other is called credit
Post Thu Feb 09, 2012 6:56 am
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neivindamin
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credit means to give loan or to take loan and debit means you have to give money back.
Post Fri Feb 24, 2012 11:50 am
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