Everyone is familiar with the expression "reduce debit to credit." But for many, it remains a mystery what these concepts mean. Therefore, in this article we consider what debit and credit are, as well as credit and debit turnovers. 
Accounting functions
With the help of accounting, an analysis of the activity of the enterprise is carried out, its property, capital, and obligations are taken into account. One can easily understand whether a business is profitable or unprofitable. Therefore, when funds are received, tangible assets are written off or payments are made to suppliers, this is recorded in accounting in monetary terms.
The main rule of accounting is the following - how much has come, the same should go. It is also called the principle of conservation of value.
What are debit and credit?
Debit and credit are concepts used in accounting for the analysis of all processes of an enterprise. There are many accounting accounts, and they were all created to reflect business transactions. Each of the accounts has its own name and number.
So, let's compare debit and credit turnover.
Debit represents all available assets that belong to the organization. That is, this is the property that the company currently has. Property may mean:
- Funds held in a bank account.
- Cash at the cash desk of the enterprise.
- The total value of goods in warehouses.
- The total value of all fixed assets owned by the company.
- Current debt of counterparties.
Accordingly, the larger the assets the company has, the more successful it is considered. The source of the formation of assets may be the authorized capital.
Debit turnover refers to the total amount of all incoming transactions reflected in the debit. Credit turnover is the sum of all expenditure transactions recorded on a loan. It should be understood that this is an active account. If the account is passive, then the situation is the opposite. Incoming operations display on credit, expenditures, respectively, on debit. 
Liabilities are all the debts of the organization. These include:
- Possible arrears resulting from non-payment of salaries to employees.
- Debt of the enterprise to its counterparties.
- Depreciation charges.
- Debt of an enterprise to its founders or subsidiaries.
Where are debit and credit transactions applied?
Accounting is carried out for each account separately. Debit is shown on the left, and credit is the column on the right. Each operation must be necessarily reflected. Some accounts are used quite often throughout the reporting period. The debit columns should reflect the amounts characterizing each transaction separately. Accounts are conditionally divided depending on the balance: they can be active (account 51 "Settlement account"), passive (account 86 "Reserve capital"), as well as active-passive (account 76 "Settlements with debtors and creditors").
If the property of the enterprise increases or claims arise, then the debit turnover increases in active and active-passive accounts. Conversely, if the property decreases, then there is an increase in credit turnover.
Business transactions on passive accounts are reversed. Basically, these accounts are used to see where the funds came from. 
Ending balance
At the end of each reporting period, it is necessary to summarize separately all revolutions of debit and credit. As a result, a final balance is formed. In the event that there is a complete coincidence in the amounts in the debit and credit turnover of the account, you can close the account. There are accounts that have a zero balance at the end of the period. As a rule, these are accounts to which expenses are written off.
In order to calculate the balance in the current account, the volume of credit turnover (this is the amount of spent funds) is deducted from the debit turnover (amount of funds received). The incoming balance must be added. This is on active accounts.
If the account is passive, then to determine the final balance, credit turnover is added (this is the amount of funds received) and debit is deducted (this is the amount of funds spent). In active-passive accounts, debit and credit balances are determined according to analytical accounting. 
What is double entry?
The concepts of credit and debit reflect the so-called double entry. That is, it is assumed that each business transaction must be recorded using two accounts. It turns out that on one account the transaction cost goes into debit, and on the second - on credit. As a result, equilibrium should be formed. That is, the balance should converge every time. In the event that a situation arises in which the total debit turnover does not overlap the total credit turnover, then we can conclude that an accounting error was made when accounting for transactions.
The concept of turnover on the current account of the company
One of the most important performance indicators of an organization is the credit turnover on a current account. This term is equally often used not only by accountants, but also by bankers and auditors. Unfortunately, private entrepreneurs and start-up businessmen do not fully understand the whole essence of its content. 
Depending on the purpose for which they use accounts, they are divided into the following types:
- Deposits, which are usually used to save or save money.
- Credit, which are opened in order to service loans.
- Settlement accounts, which are necessary for conducting business activities.
- Cards, access to them is provided using cards that are issued to customers.
Actually, regardless of the type of account, they all display only two types of operations:
- Crediting funds - receipts from counterparties for services or goods sold, work performed.
- Cost of funds - withdrawal or transfer of funds in the conduct of business. It can be payments to suppliers, transfers of employee salaries, taxes and deductions.
Account turnover
The whole set of transactions performed on the account for a specific time period (day, month, year), as well as reflected in the bank statement, represents the general concept of turnover on the current account. Such an account can conditionally be divided into two parts:
- Debit turnover. It is a collection of cash receipt operations.
- Credit turnover of the bank. It reflects the totality of cash flow transactions.
At first glance, everything is obvious. However, everything is so simple only until the moment when the bank account holder for the first time receives an extract from the bank. It shows that the tax payment transaction is displayed on debit, the receipt of funds as material assistance from the founder is displayed on the loan. In addition, the bank statement displays a negative account balance at the end of the banking day.
It is important to remember that a bank statement in its essence is a bank accounting document, and not the account holder. It turns out that since the bank temporarily owns third-party funds, then, formally, it is the debtor of its client.And the receipt of funds in the current account, respectively, increase the amount of his debt. But the deduction of funds from a bank account just reduces the debt of the bank to its client. 
The nature of credit turnover
What can be operations on a current account?
- Cash flow from the current account to the cashier of the enterprise.
- Cash payments made to suppliers for purchased products, or to contractors - for work performed.
- Tax deductions in favor of the state budget.
- Transfers in repayment of loans and credits.
- Money transfers in favor of social security bodies or in favor of insurance funds.
- Transfer of funds representing accrued interest on the use of loans.
- Investments of a financial nature.
The concept of net indicators
The cleared revolutions of the current account are:
An organization’s performance indicator, as well as an index of financial well-being.
The concept used in accounting slang. That is, it is not used in the legislation, does not appear in contracts.
If you do not delve deeply into financial and accounting terminology, then it can be accepted as a rule that the turnover on the current account is an activity index, and the net turnover is an organization success index. That is why, the second category is often used enough:
- auditors in the analysis of the organization;
- tax authorities in order to exercise control over the timely payment of taxes;
- bank representatives in order to establish the solvency of the potential recipient of the loan.
Banking transactions not subject to accounting
Actually, the turnover on the current account can be defined as a mismatch between the debit and credit cash flows and their actual expenditure for a certain period. However, it is worth noting that when calculating the cleared turnover on the account, not all receipt operations can be taken into account, but only those that are directly related to the implementation of the enterprise. 
Non-accounting transactions include:
- Any receipts to the current account of funds that are borrowed, that is, receipts of credit funds, any financial assistance, regardless of whether it is refundable or not.
- Income from the sale of securities. It can be bills or stocks.
- Return to the owner of funds that were listed erroneously.
- Revenues that occurred from other own accounts of the company opened with other financial organizations.
Thus, from this article we learned what debit and credit are, and how transactions are recorded. We also considered the concepts of debit and credit turnover for the reporting period.