![]() ![]() An example is provided below, where a bill is created for 1,000. The debt due to you (an asset) increases so it is a debit and sales (income) increases and it is therefore a credit. Every time a bill is created but is not marked paid, a journal entry is created, which credits the Accounts Receivable with the bill amount. Expenses, where destinations are a contractor or a supplier, whom the money paid to. Destination is an entity that now owns it. The debit column is to the left and the credit column to the right.įor example when when paying for the rent for premises from the bank (an asset) the bank decreases so it becomes a credit and rent (an expense) increases so it is a debit:Īnother example is if you send an invoice to a customer with 30 days credit. Debit (Destination): Assets, where entity gains: building, cash and equipment. Liabilities (Accounts 2000-2999 in Bokio)Īssets and expenses increase in debit whilst equity, income and liabilities increase in credit.There are five different types of accounts that can be debited or credited. Bokio will normally calculate this for you based on our bookkeeping templates. ![]() The debit side must always equal the same as the credit side. In double-entry bookkeeping, debits and credits are kept in separate columns allows for each to be recorded independently. We create accounting records in different accounts in the chart of accounts and use double entry bookkeeping. After all, who doesn’t like being good at what they do? Do I really have to know about debit and credit when using Bokio?Īlthough we’d like everyone to be able to use Bokio regardless of their level of knowledge about bookkeeping, we’d also like to teach people about how bookkeeping works. ![]()
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