Debit- an accounting term denoting the left side of an account, which has the form of a two-sided table.
In its turn credit- a term denoting the right side of an account.
What is used for
Debit and credit are used to reflect in the accounting of each transaction to be reflected in the balance sheet accounts. For example, the receipt of payment for previously shipped goods from the buyer is reflected simultaneously in the debit of the “Settlement account” account and in the credit of the account “Settlements with buyers and customers”.
Application rules
For the debit of active balance accounts, i.e. accounts for registering the assets of the enterprise, indicates the presence of assets at the beginning of the reporting period and their increase during the reporting period. For example, when funds are received, the received amount is reflected in the debit of the “Settlement Accounts” account.
The credit of the active accounts of the balance reflects the decrease in the corresponding assets. For example, when paying from a current account, the payment is reflected in the credit of the “Settlement Accounts” account.
For the debit of passive balance accounts, i.e. accounts of registration of sources of funds (liabilities) of the enterprise, a decrease in the sources of funds of the enterprise is reflected. For example, when an enterprise receives a loss at the end of the reporting period, the amount of the loss is reflected in the debit of the account “Retained earnings (uncovered loss)”, thereby reducing the sources of the enterprise’s funds.
The credit of passive accounts of the balance indicates the availability of sources of funds of the enterprise at the beginning of the reporting period and their increase during the reporting period. For example, the profit received by the enterprise at the end of the reporting period is reflected in the credit of the account “Retained earnings (uncovered loss)”, thereby increasing the sources of the enterprise's funds.
The reflection of the operation on the debit of the account is called "debiting", and on the credit - "crediting" the account.
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Instruction
To determine where the debit and credit are, look at the business transaction. As a rule, a debit reflects the amounts owed to you, and a credit is what you owe. For example, you work with any contractors. The amount that you have to pay for the goods will be reflected in the credit balance. In the event that buyers owe you, the amount owed will be debited.
If you see a journal of business transactions in front of you, pay attention to the fact that all transactions are registered twice, that is, there will be the name of the movement, and then two columns. To determine which of them is a debit and which is a credit, it is enough to know that the debit is always recorded on the left side, and the credit on the right.
To determine debit and credit, you must know that if the account is active or active-passive, an increase in the debit balance leads to an increase in the organization's assets. Whereas an increase in credit on these accounts leads to a decrease in the value of the property.
The balance is always tied to a certain period. In the "pre-computer" era, the accounting period was . The opening balance was transferred from the end month, and the end balance of the current month had to be calculated manually. Now in accounting programs, balances are displayed on an arbitrary date.
active accounts. The reporting period starts with accounts debit balances (db_beginning). Receipts to these accounts are reflected in debit turnover (Db_Turn), and disposal - in credit turnover (Cr_Turn). The period ends with the calculation of the debit and credit turnovers and the conclusion of the final balance (Db_end), which then moves to the next reporting month: Db_End = Db_Start + Db_Turnover - Kr_Turnover
The reporting period begins with accounts with credit balances (Cr_Start). Receipts to these accounts are reflected in the credit turnover (Kr_Turn), and disposal - in the debit turnover (Db_Turn). The reporting period ends with the calculation of credit and debit turnovers and the conclusion of the closing balance (Kr_end), which then moves to the next reporting month:
Active-passive accounts. These accounts have both a debit and a credit balance. The final balance is displayed as follows: If the sum of Db_Start - Kr_Start + Db_Turn - Kr_Turn is greater than zero, then it is put in the final balance on debit, zero is written on credit. Otherwise, the minus is removed and the amount received is written to the final balance on the loan, zero is written to the debit.
In real accounting, each account has its own role. For example, the account "Salary". Here, the accounting period is most often a month. The incoming balance for each personal account is the lost salary of the last month (debt for the enterprise), or the overpayment of wages in the past month (debt for the employee). Accordingly, these are the debit and credit parts of the opening balance. You need to calculate the final balance (in fact, the salary of the current month) according to the scheme: Debt for the enterprise - Debt for the employee + Accrued - Withheld. If you get a positive result, you have something to receive this month.
Sources:
- loan closing balance
In accounting, the balance is the difference between the debit and credit of a particular account. This indicator is used to identify the balances this species economic assets for a certain period and is calculated when compiling the balance sheet. In order to find the balance, you must first determine the nature of the account.
The expression "reduce debit with credit" is probably familiar to everyone. Many people don't even understand what that means. Therefore, below we will try to explain as simply as possible what debit and credit are.
What is accounting for?
Why was bookkeeping invented? In order to take into account the property of the enterprise, its obligations, capital and in general all its activities.
Imagine if you counted goods in pieces, gasoline in liters, and money in rubles, it is not clear how to bring it all together? How to understand whether the company is making 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 accounts of the enterprise, the write-off of material assets or settlements with suppliers, are recorded in accounting in monetary terms.
The basic rule of accounting is the principle of conservation 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.
Debit and credit
What we talked about above is called the principle of double entry. That is, any action in the organization must 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: a debit is an income, and an expense is a credit, the left and right columns of the account, respectively.
To make it clearer, imagine that you go to the store, take out 2,000 rubles from your wallet (let's call it "Cashier") and buy a dress. In this case, the amount leaves the credit of the "Cashier" account and comes 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 out of the credit of the account, but goes into the debit. This transfer of value is called double posting.
What is a debit and credit balance
To understand what a balance is, let's look at a simple example again.
So, you have decided to open a greenhouse sales outlet. It was in autumn. At the same time, to make it easier for us, your organization has no money, no debts, or even the greenhouses themselves yet. But on the other hand, 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.
- Step 1. The buyer pays you 100,000 rubles and calmly waits for spring, that is, you have not yet shipped the greenhouses to him. Let's compose accounting entry: since the money went from the buyer’s wallet to your cash desk, we get such a double posting (our account names are conditional, of course):
- Step 2 You decide to transfer almost the entire amount received from the buyer (namely 90,000 rubles) to your account in the bank. That is, this money left your cash desk (we write it down on credit), but it came to the current account (we write it in debit). This is what this operation looks like in double entry:
- Step 3 You find a manufacturer who will supply you with greenhouses, and conclude an agreement in the amount of 160,000 rubles. At the same time, you agree that this month you will transfer only half of the amount (that is, 80,000 rubles), and pay the rest later. You transfer 80,000 rubles from the current account to the supplier. This will show up in your account like this:
- Step 4 You received greenhouses from a supplier in the amount of 160,000 rubles. So, in the credit of the “Supplier” account we write 160,000, in the debit of the “Warehouse” account the amount will be the same:
This is the end of the first month of your work and it's time to take stock.
Credit and debit turnover
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.
“R / s 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.
What is a debit balance
Now it remains to withdraw the balance that turned out for all accounts. This value will be called the "Final Balance". To calculate the balance, it is necessary to minus the smaller one from the larger turnover.
Consider, for example, "R / c in the bank." The debit turnover is 90,000 rubles, and the credit is 80,000. The first amount is larger, which means that the balance here is debit: 90,000–80,000 \u003d 10,000 rubles. We write it 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 is 160,000. In this case, the balance turned out to be credit: 80,000 - 160,000 \u003d 80,000 rubles (also in the red box).
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.
According to the Buyer's Wallet account, there is a credit balance and it reminds you that in the spring you must give the buyer a greenhouse in the amount of 100,000 rubles.
The balance on the account "Cashier" is debit. It means that the cash desk of your organization is 10,000 rubles.
The debit balance on the third account shows that you have another 10,000 rubles in your bank account.
On the fourth account, we got a credit balance that will not let you forget that you owe the manufacturer 80,000 rubles.
Well, the last account with a debit balance tells that greenhouses in the amount of 160,000 rubles are in your warehouse.
What's next?
You continue to work, and the balance sheet should reflect subsequent transactions. But first, it is necessary to transfer the ending balances of the previous period to the beginning of the new one. Such balances will be called incoming, they must be written in the appropriate column: debit balance - on the left, credit - on the right.
Let's go back to the example. You decided to transfer another 7,000 rubles from the cash desk to the current account. Two accounts are involved. First, do not forget to transfer the incoming balances over them (circled in green in the figure below), then we record the wiring for 7,000 (in Kt "Cashier" and in Dt "R / s").
No further actions were taken on the accounts during this period.
At the end of the 2nd month, we first calculate the turnover, while we do not pay attention to the opening balance yet (turnovers are circled in blue). Then we calculate the final balance (in the red rectangle), already taking into account the incoming balance. It turns out the following picture:
Of course, these are rather primitive examples. In fact, accounting is much more complicated. But it is quite possible to get the basic concepts of what debit, credit and balance are from this article.
The economy will be put on a strict diet, and import substitution will be offered as “vitamins”.
Options for the development of the country next year are being actively discussed not only at the political level, but also in expert circles. How will the economy grow? What is more important - the growth of wages, pensions or the fight against inflation? What will the dollar exchange rate be like? How can you get a non-deficit budget? Garegin Vardevanyan, deputy director of the Institute of Economics of the National Academy of Sciences of Belarus, voiced his point of view on these issues to NG.
Garegin Levonovich, for the next year, the growth of gross domestic product of 5-5.5 percent was taken as the basis for the forecast. Let's start simple: how will this affect the standard of living of each of us?
In principle, GDP growth is associated with increased wealth. Obviously, the more value added is produced, the more opportunities for its distribution among citizens, enterprises and the state. But everything is not so simple here. We must not forget about the qualitative characteristics of this growth. Let's say the same amount of money can be earned in one day of work or in three days, producing one or three units of output. Here, the quality of the work or the goods produced comes to the fore. It is possible to have GDP growth, but at the same time face a depreciation of the national currency, which devalues the wealth earned. That is why it is important that economic growth is achieved not at any cost, but by maintaining exchange rate stability and low inflation.
To this end, the government intends to tighten monetary policy and reduce emission lending to the real sector of the economy. But at the expense of what then will we grow, finance state programs? Will the printing press need to be turned on again?
Next year should be a year of economic recovery. It is necessary to eliminate the consequences and disproportions that have accumulated recently in connection with the devaluation of the ruble, accelerated inflation, and so on. The imbalance of the economy was caused by the fact that we spent more than our income allowed. The main source of later recognized “living beyond one's means” was excessive lending to the real sector, including concessional lending to housing construction and other state programs. In many areas, you can afford to cut costs without much damage.
For 10 years in Belarus:
- Almost 1.5 thousand import-substituting projects implemented
- More than $3.8 billion invested in import substitution programs
- Produced import-substituting products worth $14 billion
- Replaced 12 percent of imported products.
The main source of growth should be external demand for Belarusian products, which will allow reaching a positive foreign trade balance. In this context, a great help for us is the reduction in prices for Russian gas, on which we can save up to two and a half billion dollars.
But so far, what we sell for export does not pay for the import of energy carriers, materials and components. How to get out of this situation?
There are only two ways here. First, since we cannot influence the prices of imported raw materials, materials, components, it is necessary to increase the share of value added in products manufactured for export by improving their quality. The second is to develop import substitution. Approximately 75 percent of the total imports are goods of the so-called intermediate imports, which we are basically unable to replace due to lack of natural resources: hydrocarbons, metals, natural gas. There is also a group of consumer goods, the import of which cannot be refused: tea, coffee, citrus fruits...
At the same time, for many goods, import substitution can and should be carried out, but not in the primitive interpretation of this term. It should not become an end in itself. In each specific case, it is necessary to calculate whether “the game is worth the candle”. Import substitution should be based on the implementation of those projects and on those commodity items for which we are not able to compete with foreign manufacturers. Attracting foreign investment from companies with a world-famous brand will contribute not only to meeting domestic needs, but also to the growth of exports. The state's attention should be focused on such projects, including in terms of creating attractive conditions for investors.
Achieving balanced economic growth is impossible without curbing inflation. How realistic is it to keep it in the corridor of 19-22 percent? And on what is the exchange rate forecast of 9,150 rubles to the dollar based?
It all depends on the balance of monetary policy. The main thing is not to allow excessive growth of the money supply in circulation and not to spend more than you have earned. At the same time, it is necessary to tighten the antimonopoly legislation. In our economy, the elements of monopoly are quite strong, so the temporary use of state regulation of prices for certain goods to curb high inflation is quite justified. But you shouldn't get carried away with it.
As for the exchange rate, it is formed on the basis of the ratio of the mass of rubles and foreign currency in the economy. In a rough approximation: if the number of rubles doubles, and foreign currencies remain the same in circulation, then the ruble will depreciate approximately twice. So there has to be a balance...
A deficit-free republican budget is planned for next year. Due to what it is possible: will we earn more or spend less?
At the end of this year, a budget surplus of 0.7 percent of GDP is expected. That is, the treasury will receive more income than it spends. Next year, the growth of expenditures of the republican budget is envisaged with a slight, but still ahead of the average annual price growth. This means that the social budget expenditure items in real terms will be higher than this year.
Why is the government talking about the need to limit domestic demand? Is it unprofitable for enterprises to increase production and sales volumes?
The criterion for stimulating or contracting domestic demand is financial stability in the economy. It is possible to expand demand only within acceptable limits, not leading to an increase in inflation and destabilization of the exchange rate. In the current situation, the restriction of domestic demand is precisely designed to stop the process of price growth. If this is not done, sooner or later inflation will lead to a decrease in output.
Apparently, such an instrument as raising the refinancing rate is being used to limit domestic demand and financial recovery of the economy?
Quite right. By raising the refinancing rate, the National Bank, on the one hand, reduces the demand for credit resources, as they become more expensive. Naturally, for many enterprises this is a serious shake-up: in order to survive, they need to rely on their own strength, work more efficiently, increase the profitability of production, and seek investment. On the other hand, the attractiveness of ruble deposits is increasing. The more income ruble deposits bring, the more willingly people bring money to the bank, there is an incentive to save what they earn more than to spend. The diversion of money into savings reduces the pressure on both the commodity and foreign exchange markets. Accordingly, there are prerequisites for reducing inflation and stability of the Belarusian ruble exchange rate.