Investor Glossary-debitInsightful stock market charts - Click here

 # A B C D E F G H I J K L M N O P Q R S T U V W X Y Z     
Term of the Day Email this Definition Link to this Definition

Debit


A debit is a bookkeeping entry that results in the increase of an asset or a decrease in a liability or owners equity. A debit has the opposite effect of a credit, which either decreases an asset or increases a liability or owners equity. A debit (or credit) per se is neither positive or negative for the company's financial position. For example, if the company receives cash (an asset), a debit is posted to the cash account, because a debit increases an asset. If the company receives a telephone bill (thereby incurring an expense, which decreases owners equity), a debit is posted to the utility expense account, because a debit decreases owners equity. Therefore, rather than consider a debit as something either good or bad, it's better to think of a debit as merely a left-side bookkeeping entry (assets are listed on the left side of the balance sheet) and a credit as a right-side bookkeeping entry (where liabilities and owners equity can be found).

Rate this debit definition...

               


Where is the market headed? The answer may surprise you. Find out
right now with the exclusive & Barron's recommended charts of Chart of the Day.


Popular Terms: EBITDA, liquidity ratio, 401a, deferred tax, command economy, 144a, per diem, margin rate, deferred revenue, required rate of return, cancelled check, open position, stock split, ex-dividend, implied volatility, in escrow, irrevocable trust, limit order, quality assurance, risk management, 1035 exchange, Key Rate Duration, class C shares, current ratio, Zero Cost Collar, 1031 exchange, wholly-owned subsidiary, VIX, reverse mortgage, retained earnings, phantom income, option premium, minority interest, labor relations, ex-dividend date, covered put, real GDP, LIBOR, inflation, dividends payable, diluted share, debt service coverage, balance sheet, APR, equities, average price per share, FICO score, FTSE, stock market close


Home | Term of the Day | Tell a Friend | Suggest a Term | Edit Subscriber Detail
Accounting | Banking | Bonds | Brokers | Economy | Futures | Mutual Funds | Options | Real Estate | Retirement | Stocks | Taxes | Technical Analysis
©2004-2009 Investor Glossary - All rights reserved - Terms of Use