Results for “Debit”
Results found: 40.
Accounts
Glossary
Debit
The left-hand side of an account. In asset accounts a debit means an increase; in liability and equity accounts it means a decrease. Abbreviated as "Dt".
Double-entry bookkeeping
The basic rule of accounting: every business transaction is recorded in the debit of one account and in the credit of another account for the same amount.
Journal entry
A record of a business transaction showing which account is debited and which is credited.
Balance (of an account)
The balance of an account: the difference between total debits and total credits. There is an opening balance and a closing balance for a period.
Turnover (account activity)
The sum of all amounts recorded on the debit or the credit side of an account during a certain period.
Accounts receivable
Amounts that other persons and organizations owe to the company. For example, the debt of a customer who has received goods but has not yet paid for them.
Contra-equity (contra-liability) account
An account kept to reduce the value of a liability or equity account (for example, capital). Its balance is on the debit side.
Trial balance
A table showing, for all accounts, the opening balance, debit and credit turnover for the period and the closing balance. Total debits and total credits must be equal.
Journal order
An accounting register in which transactions on the credit of one account are recorded together with the debits of the corresponding accounts. The main table of the journal-order form of accounting.
Accrued interest
Interest that has been accrued on loans and borrowings received but not yet paid. It accumulates on the credit side of account 6920 and is written off from the debit side when paid.
Overpaid tax
The amount a taxpayer has transferred to the budget in excess of its assessed liability. It remains the taxpayer's funds: in the manner set by the Tax Code, it may be offset against other payments or refunded. In the accounts, it shows up as a debit balance in account 6410.
Cash equivalents
Under NAS No. 21, valuables kept in the cash desk: the standard lists them as "stamps, coupons and other cash equivalents" (paragraph 235). They are recorded in account 5610 at face value: the account is debited when they are purchased and, when used, they are written off to expense accounts.
Primary production
Producing goods, performing work or rendering services that make up the company's main activity. Its costs are accumulated in the debit of account 2010: direct costs, auxiliary production services, production overheads and losses from defective output (NAS No. 21, paragraphs 117–119).
Amount receivable under a claim
An amount the company demands from its counterparty (supplier, transport organization, bank and others). NAS No. 21 (paragraph 213) lists the following claims in account 4860: prices and tariffs in invoices that do not match the contract or price list, and arithmetic errors; shortages of cargo; defective products and downtime caused through the fault of a supplier or contractor; amounts wrongly debited by a bank; fines, penalty interest and forfeits recognized by the payer or awarded by an economic court. The amount of a claim not recognized by the payer is not reflected in the accounts (paragraphs 213–214).
Cash desk
The place in a company where cash is kept and where cash payments are received or made. National currency in the cash desk is accounted for in account 5010, foreign currency in account 5020: money received into the cash desk is reported in the debit, and money paid out of the cash desk or deposited with the bank in the credit (NAS No. 21, paragraph 222).
Settlement (current) account
A company's account opened with a bank in national currency: receipts come into it and payments are made from it; if there are several, analytical accounting is kept for each one. Money coming in is reported in the debit of account 5110 and money going out in its credit; erroneous amounts in a bank statement are corrected through accounts 4860 or 6960 (NAS No. 21, paragraphs 224–225).
Bill of exchange issued
A bill of exchange that the company gave to a supplier instead of payment for goods, materials, work or services purchased. Until it is paid, the debt secured by the bill stays on the credit of account 6020 (if up to 12 months) or 7020 (long-term). On payment, the bill amount is debited to 6020 and the interest on the bill to 6920.
Payables to the budget
The company's debt to the state budget for taxes and other mandatory payments that have been assessed but not yet paid. It is recorded on the credit of account 6410; analytical accounting is kept separately for each type of tax. Advance payments made earlier are debited to 6410 from account 4400, and actual payments from the cash accounts.
State trust funds
State trust funds to which the company pays contributions. Under NAS No. 21 (paragraph 278), account 6520 is used to summarize information on the organization's payables to state trust funds for contributions. An assessed contribution is recorded on the credit of 6520 in correspondence with expense accounts (a contribution made at the employee's expense, with 6710), and 6520 is debited on payment. Analytical accounting is kept separately for each fund for which the company is a payer.
Dividends payable
The amount of dividends not yet paid after a decision to pay them has been declared. Under NAS No. 21 (paragraph 281), after the organization's management declares a decision to pay dividends, this amount is shown as a current liability: Dt 8710 – Ct 6610. On payment, 6610 is debited.
Articles
Trade credit insurance: if a buyer who took goods on credit goes bankrupt, who covers the receivable?
A confectionery wholesaler sold 500 million soum of goods on credit to a large supermarket, and the supermarket became unable to pay. With trade credit insurance, how much of the loss comes back, and why do the limit set for the buyer and the seller's own share matter? Calculation and entries under NAS No. 21.
Assets, liabilities and equity: how does accounting answer the questions «what do we have» and «where did it come from» on the day a café opens?
The second lesson of the course: the nine most essential accounting terms (asset, liability, equity, liabilities and equity as sources, accounts receivable and accounts payable, balance sheet, account, primary document) shown on the opening day of one café, and why the two sides of the balance sheet always come out equal.
Refund of excessively collected tax: a template application to the tax authority
Did the tax authority debit more than necessary from your account through a collection order? The filing deadline, refund deadline and interest under Articles 103–105 of the Tax Code, the forced collection procedure, step-by-step actions, a template application in the name of a fictional company (DOCX) and an analysis of the wrong article references in an old template.
How many days does it take working capital to turn back into cash? Calculating the turnover ratio and the turnover period
Using a furniture workshop's annual figures, we calculate the turnover of working capital, inventories, receivables and payables in days and show how much cash is released if the operating cycle shortens by 15 days.
Why does the auditor send confirmation letters to your debtors?
If a customer's debt is confirmed by the customer itself rather than by the company, the evidence is stronger. How external confirmation works.
Debit and credit: which one is an increase and which one is a decrease?
A simple answer to the question that confuses accounting learners most: one table and two examples.