What do debit and credit mean on the balance sheet?
Posted: Tue Jan 28, 2025 5:33 am
Do you owe someone an amount of money? Then you call this person a creditor. All creditors go under liabilities because they are short-term debts. All debtors go under assets. Debtors actually owe your company money. The words credit and debit are derived from creditor and debtor. The credit/debit meaning is therefore as follows: a debit is money that is still leaving your company and a credit is money that is still coming in, a credit. Each debit and credit should be reported on your balance sheet.
What is "assets" and "liabilities"?
In the balance sheet section, you will also encounter the concepts of assets and liabilities. The assets are all the assets of your company, the liabilities are the debts and equity.
When we dig deeper into the asset meaning, you can see that a venezuela mobile numbers list distinction is made between fixed assets and current assets. Fixed assets are those assets that you don't simply resell and that are tied to your business for more than a year. Fixed assets examples are your business premises, machinery and a company car, as well as software. Current assets can and often are converted into cash within a year, such as your inventory, as well as your cash and other cash on the balance sheet.
If we look at the liabilities on a balance sheet, you see that in the liabilities meaning you can also distinguish between fixed liabilities and current liabilities. Fixed liabilities also have a term of more than one year, think of a mortgage loan and reserves. Current liabilities are short-term debts such as outstanding VAT or an outstanding account with a supplier. With everything on the liabilities side of the balance sheet, you can finance everything on the assets side.
What is "assets" and "liabilities"?
In the balance sheet section, you will also encounter the concepts of assets and liabilities. The assets are all the assets of your company, the liabilities are the debts and equity.
When we dig deeper into the asset meaning, you can see that a venezuela mobile numbers list distinction is made between fixed assets and current assets. Fixed assets are those assets that you don't simply resell and that are tied to your business for more than a year. Fixed assets examples are your business premises, machinery and a company car, as well as software. Current assets can and often are converted into cash within a year, such as your inventory, as well as your cash and other cash on the balance sheet.
If we look at the liabilities on a balance sheet, you see that in the liabilities meaning you can also distinguish between fixed liabilities and current liabilities. Fixed liabilities also have a term of more than one year, think of a mortgage loan and reserves. Current liabilities are short-term debts such as outstanding VAT or an outstanding account with a supplier. With everything on the liabilities side of the balance sheet, you can finance everything on the assets side.