What are debit and credit?
Do I really have to know about debit and credit when using Bokio?
Although 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. After all, who doesn’t like being good at what they do?
We create accounting records in different accounts in the chart of accounts and use double entry bookkeeping. There is a debit side and a credit side. To give everything structure, ask yourself two questions:
- Where are the resources coming from?
- Where are the resources going?
So there’s always something increasing (debit) and something reducing (credit). The debit column is to the left and the credit column to the right. There’s also a basic rule: “Assets increase in debit, while liabilities increase in credit”.
Examples of debit and credit when paying the rent for premises: