Debit and Credit
This query is : Resolved
Sanat Kumar
(Querist)
09 May 2011
Dear All!
The query pertains to Debits and Credits.
Expense is debit since money is going out but why is Asset debited when we are actually receiving something. It should be credited i.e. increase should be credited rather than debited.
In short what does Debit and Credit actually mean in accountancy.
The query pertains to Debits and Credits.
Expense is debit since money is going out but why is Asset debited when we are actually receiving something. It should be credited i.e. increase should be credited rather than debited.
In short what does Debit and Credit actually mean in accountancy.
CA Navin Jain
(Expert)
09 May 2011
WE HAVE DEBIT TO EXPENSES SINCE WE HAVE RECEIVED THE SERVICES OR PURCHASE SOMETHING WHICH IS NOT RELATED TO FUTURE AND DEBITED TO ASSETS SINCE THEY RELATED TO FUTURE, IN THE BOTH CASH THERE IS INCOMING SOMETHING
Sanat Kumar
(Querist)
11 May 2011
That means when something is coming to the business it is debited because it has to be paid back to the sender
Sanjeev Sandh
(Expert)
14 May 2011
Expense is debited when it is incurred, whether or not you are paying for it now. Asset is debited when you acquire it. You are not comparing apple to apple, because you are forgetting that expense is different from asset. They are not comparable and do not follow the same rule.
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