0

I am new to keeping accounts.

Today I learned that

  • debit is what comes in
  • credit what goes out

Then how can we say that salary gets credited when the money comes in?

  • Can you provide a reference for the text that said "debit is what comes in, credit is what goes out"? – dg99 May 28 '14 at 18:07
  • Debit means left; Credit means right Link – Ross Dec 23 '15 at 13:49
2

Based on the definitions I found on Investopedia, it depends on whether or not it is going against an asset or a liability. I am not sure what type of accounting you are performing, but I know in my personal day-to-day dealings credits are money coming into my account and debits are money going out of my account.

Definition: Credit, Definition: Debit

2

Waddler said it right, it depends on whether or not it is going against asset or liability. Your salary is said to be credited in bank's term, whereby the bank experiences a increase in its liability (your bank deposits) and hence its a credit for them. We usually understand that its a credit for us, however not. This is what I understand. Here is an article I found in this context. http://www.quickmba.com/accounting/fin/debits-credits/

0

If one is looking at this from the perspective of a store where debits could be how money comes into the store's account and credit is what has to be paid out to customers, then the employee salaries would also be something going out of the account for the store.

Not the answer you're looking for? Browse other questions tagged or ask your own question.