What Does The Word Credit Mean In Terms Of Accounting


  • 11 Mar, 2012

    The word "credit" is part of the equation of double entry bookkeeping.In order for bookkeeping entries to balance, there must always be a debit (left side, abbreviated by "dr") and credit (right side, abbreviated by "cr") entry that equal one another.For example, to record an Office Supply Store purchase (on account ~ a payable), the entry would be:Office Supplies Exp $500.00(dr)Accounts Payable $500.00(cr)If an entry does not balance the totals for debits and credits, your books will be out of balance.

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