Debit balance: Difference between revisions
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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). | 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). | ||
:<span style="color:#4B0082">'''Debit balance miscommunication'''</span> | |||
: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.'' | |||
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== See also == | == See also == | ||
* [[Assets]] | * [[Assets]] | ||
* [[Balance]] | |||
* [[Balance sheet]] | * [[Balance sheet]] | ||
* [[Cash]] | |||
* [[Cash balance]] | |||
* [[Cash flow]] | |||
* [[Credit balance]] | * [[Credit balance]] | ||
* [[Debit]] | * [[Debit]] | ||
* [[Income statement]] | |||
* [[Overdraft]] | |||
* [[Overdrawn]] | |||
* [[Profit and Loss account]] | * [[Profit and Loss account]] | ||
[[Category:Accounting,_tax_and_regulation]] | |||
Latest revision as of 22:04, 18 July 2022
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.)
