What is debit and credit??

Question

Its is in my economics book - money and credit chapter (10th standard) but i am not getting the correct concept of what is credit?.?...........plzzzzzzzz help me out

Answer 1

example, i have 100 dollars and you have zero.

you mowed my lawn so i credit you 20 dollars, or i pay you 20 dollars.

but you broke something so i charge you 10 dollars, or i debit you 10 dollars.

so after these two transactions, you have only 10 dollars. i paid you 20 then deducted 10 leaving you a balance of 10.

from my end, the same transactions is recorded this way:

i started with 100, debited 20 to you for mowing the lawn, then credited back 10 for the broken thing, leaving me with a balance of 90.

so you see that we credit from some account and debit to some other account.

Answer 2

Debit is when you are using an account with money you have deposited like from a job or parents etc. You have a limit of what ever your checking account balance is, if you go over that you would receive overdraft charges. There is no interest on this because you are not in debt to anyone. Credit is like a loan this is not your money so you have to pay it back after using it. You get interest on any amounts owed. I guess thats my best explanation.

Answer 3

Simply put, debit is removing funds from an account.
Credit, the opposite of debit is adding funds to an account.

Answer 4

Debit and credit are formal bookkeeping and accounting terms that have opposite meanings and come from Latin. Debit comes from debere, which means "to owe". The Latin debitum means "debt". Credit comes from the Latin word credere, which means "to believe"..for more explanation follow the link..

Answer 5

debit is what you already have and is taken out from your bank account. credit is what you will owe to a person or company with interest.

Answer 6

Think of credit card....buy now...pay later but WITH INTEREST and it add up FAST