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Accounting & Tax vocabulary · Bookkeeping & Ledgers

Credit

Meaning in accounting & tax, with examples

/ˈkredɪt/nounCore term

In accounting & tax, credit means: An entry on the right side of an account. Credits increase liability, equity and revenue accounts and decrease asset and expense accounts.

In Turkish: alacak, alacak kaydı

How it is used

The partner of debit in double-entry bookkeeping, shortened to Cr. As a verb, you credit an account. Outside bookkeeping, credit also means a loan or buying now and paying later, so the context matters.

Example sentences

  1. When you pay the office rent, credit the bank account and debit rent expense.

  2. Accounts payable normally has a credit balance.

Common collocations

  • credit an account
  • credit side
  • credit balance
  • credit entry
  • debitAn entry on the left side of an account. Debits increase asset and expense accounts and decrease liability, equity and revenue accounts.
  • journal entryA record of one business transaction in the accounting system, showing the date, the accounts affected, the debit and credit amounts and a short description.
  • trial balanceA list of all ledger accounts with their debit or credit balances at a certain date, used to check that total debits equal total credits before preparing statements.
  • liabilityAn amount a business owes to others, such as suppliers, banks, employees or the tax office, which it will have to settle in the future.

This word in other fields

The same English word can have a different meaning in another field:

More terms: Bookkeeping & Ledgers

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This page explains English vocabulary for learners. It is not financial advice.