Debit balance

1. Financial accounting.

In financial accounting a debit balance is an asset within the balance sheet, or an expense within the profit and loss account (or income statement).

Debit balance miscommunication

A common miscommunication between the functions of accounting and treasury is the different use of debits and credits. Accountants/controllers are used to posting journal entries where from a balance sheet perspective a debit signifies an increase in value, and a credit a reduction in value. However, for treasury staff a credit is an increase in value, and a debit a reduction. This simple difference is often cause for some awkward conversations between both professions.

The Group Treasurer, An ACT guide to the first 100 days, Page 9.

2. Banking.

In banking a debit balance - in the bank's records - is one which stands in favour of the bank.

The customer owes money to the bank.

Also known as an overdrawn balance.

(Contrasted with a credit, or positive, balance in the bank's records. Being a balance standing in favour of the customer.)

See also

• Assets
• Balance
• Balance sheet
• Cash
• Cash balance
• Cash flow
• Credit balance
• Debit
• Income statement
• Overdraft
• Overdrawn
• Profit and Loss account