A credit is a term used with accounting reflecting one side of a dual entry. In journals, the credit is one part of the equation with a debit as the offset. When posted to the ledgers for the respective accounts, they are clearly posted in the credit column in the ledger and tagged with an identifier for the source journal.

Bookkeeping – Debits and Credits in Equity Accounts (Lesson 10)

Equity Accounts

The equity section of the balance sheet identifies the approximate dollar value of net worth accrued to the owners/investors.  Equity type accounts can have both credit and debit balances.  By far the most preferred is a credit value.  Debit values does not mean that something is wrong, actually it can be a great sign of a good operation.

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