{"id":39478,"date":"2022-05-10T07:23:21","date_gmt":"2022-05-10T04:23:21","guid":{"rendered":"https:\/\/www.simplbooks.fi\/?p=39478"},"modified":"2025-12-10T15:47:29","modified_gmt":"2025-12-10T13:47:29","slug":"debit-and-credit-where-money-goes-and-where-it-comes-from","status":"publish","type":"post","link":"https:\/\/www.simplbooks.fi\/en\/blog\/debit-and-credit-where-money-goes-and-where-it-comes-from\/","title":{"rendered":"Debit and credit \u2013 where money goes and where it comes from"},"content":{"rendered":"\r\n\r\n\r\n

In the secret language of accounting, the terms debit<\/em> and credit<\/em> are used – and in an even more secret dialect, they are called per<\/em> and an<\/em>. If you ever want to casually chat with an accounting guru and sound knowledgeable, sprinkle these words here and there. You\u2019ll make an even better impression if you use them in the right places!<\/p>\r\n

 <\/p>\r\n

\"\"<\/a><\/p>\r\n\r\n\r\n\r\n\r\n\r\n

\u00a0<\/div>\r\n\r\n\r\n\r\n

Both sides of an accounting account<\/span><\/h2>\r\n\r\n\r\n\r\n\r\n\r\n

Every account in accounting has two sides. The debit side, on the left, shows where the money goes, and the credit side, on the right, shows where the money comes from. In double-entry bookkeeping, each transaction must be recorded as a debit in one or more accounts and as a credit in one or more accounts. The total amounts on both sides must always be equal.<\/p>\r\n\r\n\r\n\r\n

\u00a0<\/div>\r\n\r\n\r\n\r\n

Debit<\/span><\/h2>\r\n\r\n\r\n\r\n\r\n\r\n

In accounting, expenses are always recorded on the debit side \u2014 that is, where the money goes. This can include purchases, salaries, insurance, car expenses or anything else. Whenever money is spent on something, it should be recorded on the debit side.<\/p>\r\n\r\n\r\n\r\n
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EXAMPLE<\/strong><\/span><\/p>\r\n

 <\/p>\r\n

An entrepreneur buys frozen fruit wholesale for preparing drinks for sale, as well as printing paper. The frozen fruit costs \u20ac100 and the paper \u20ac10, including VAT. The entrepreneur pays for the purchases using the company’s bank card.<\/p>\r\n

 <\/p>\r\n

Receipt entry<\/strong><\/p>\r\n