In the accounting department of any enterprise, a system of accounts is used to account for financial and business operations. Each of them is intended to reflect a separate group of operations on the debit or credit side. Familiarity with the structure and value of the account allows you to clarify what a debit and its postings for an accountant. We will also consider the concept of credit and the transactions reflected on it.
The concept and structure of accounts
Any operating commercial enterprise is involved in the accounting of financial transactions. To achieve the main goal of the business entity (making a profit), materials are purchased, the process of production and sale of products is carried out, settlements are carried out with personnel and accounting authorities. To reflect these operations on groups using the system of accounts. Their structure implies the definition of the meaning of certain thematic terms. Since the account has two sides, it is necessary to clarify what debit and credit are in accounting. You also need to get acquainted with values such as balance and turnover.
The debit of the account fixes the property of the enterprise, and the loan - the sources of their formation. Balance means the balance of funds or liabilities, and turnover - the value of business transactions over a period of time.
Debit and Credit Account Scheme
Depending on whether records of current or non-current property of the organization or its source are kept, there are several types of accounts:
- Active.
- Passive.
- Actively passive.
Each of these three types of accounts has its own structure. Consider them. If a active account, then its incoming and ending balances will be debit. Using information about what debit is, you can display the value of active accounts. They are intended to reflect operations related to property and its movement. Receipt of funds is reflected in debit turnover, and use is reflected in credit. Similarly for passive accounts, both balances will be recognized on credit. They are used to account for sources of property. Credit turnovers in such accounts report an increase in capital, and debit ones indicate a decrease in capital. Active-passive accounts record balances and turns on both sides.
What are debit and credit accounts? This we have already determined. It remains to bear the value of debtors (debtors of the organization) and creditors (those to whom the company is indebted).
Double entry as a way of accounting in accounting
The double entry method is designed to reflect the accountant financial transactions in parallel in several places. The amount indicated in the debit of one account is transferred to the credit associated with it, according to the characteristics of the transaction. Simply put, duplication occurs. The double entry once again explains what debit and credit are to account for financial transactions.
The specificity of this method is closely related to the meaning of the following concepts:
- Account correspondence, i.e., the mutual relationship between them.
- Posting, i.e. visual aid of offsetting accounts.
General and detailed accounting
Depending on the details of the accounts, they are divided into three groups:
- Synthetic (generalized).
- Analytical (detailed).
- Subaccounts (interim).
Depending on the use of accounts in accounting, it is similarly divided into two types.
- Synthetic is a generalized accounting of operations. It is carried out on the basis of synthetic accounts.
- Analytical - thorough accounting of operations that are divided into groups. It is based on analytical accounts.
There is the main principle of general and detailed accounting, which consists in the equality of balances and turns on the analytical accounts and the synthetic account opened to it.
Accounting paperwork
What is a debit and credit posting? Now you need to consider this concept. As already mentioned, posting in accounting means text. It indicates the debit account and the corresponding credit with it or vice versa. Postings are divided into simple, affecting only two accounts, and complex, reflecting several accounts related to the operation.
Accounting entries are made out in the form of documentation in which records are kept. It can be magazines - orders or memorial orders. Also, most often, for their visual reflection, balance sheets are used, which are of great importance for the preparation of financial statements.
The data in the statement is entered in the form of debit and credit entries. By the end of the month, balances are displayed. In total for the entire reporting period, these data are transferred to the balance sheet. This accounting procedure allows us to understand what debit and credit are in the balance sheet. Accordingly, thanks to documented transactions, the value of the active and passive side of the concept under consideration is formed.
Accounting accounts are a whole way of keeping records. Without them, it would be impossible to reflect financial and business operations by dividing them into groups. Thus, we examined what debit in accounting, credit and their significance are.
