In Banks point of view debit means u have deposited money in the bank . and credit means u have withdraw money from the banks. in other word we can say that if debit bank balances shows in bank statement this means it is the unfavorable condition for the company and credit balance means it is the favorable condition for the company.
From Bankers point of view Debit is All Withdrawals by the customer, Bank charges and service tax on certain services rendered by bank and Credit is all Deposits by the customer, Interest on the favorable balance for a defined period by the bank. In other words for the banker Debit is decrease in balance and Credit is increase in the balance of the account
ALL DEPOSITS ARE LIABILITY TO THE BANK AND ALL PAYABLE ARE EXPENDITURE TO BANK. IT MEANS OUR DEPOSITS (SUCH AS SB A/C. C.A. A/C., RECURRING DEPOSITS ETC., ARE PAYABLE TO DEPOSITORS WHICH LIABLE TO THE BANK (CREDIT) AND PAYMENTS SUCH AS INTEREST ARE REPAYING OF BALANCES (WITHDRAWALS OF CUSTOMERS) ARE EXPENDITURE TO THE BANK (DEBIT)
In Banks point of view debit means u have deposited money in the bank . and credit means u have withdraw money from the banks. in other word we can say that if debit bank balances shows in bank statement this means it is the unfavorable condition for the company and credit balance means it is the favorable condition for the company
The rules of Debit and Credit are same in all occasions. The general rule is the Receiver will be Debited and the Giver will be credited. Whenever we make deposits we will debit the Bank why because he is receiving with a view to act as custodian of our money. When ever require funds we will credit the Banker to the actual balance with our Banker or we became debtor to the Bankers.
As and when the balance in the account decreases it will be a debit and if the balance increases it will be a credit. This scenario is when we are talking about a individual bank account. If we taking only the bank then the deposits, service charges etc will be debit as the amount (balance) increases. Withdrawls would be a credit as the amount (balnce) will decrease.
In general we categorise debit and credit based on different accounting types likewise personal, real and nominal account. But when it comes to bank perspective, debit indicates withdrawls and credit indicates deposits which the customers maintain their accounts with the banks.
1. If assume we paid 50/- as an advance for worth or 100/- goods, but our supplair sent only up to 25/- worth of goods. Know My question is that we want to close the transaction now. How it possible? 2. what about VAT like Tax Setups in AP and AR? 3. what about the SWEEP command in AP?