Debenture and Debit: Difference between pages

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A certificate in which a company acknowledges a debt for a specified sum on which interest is normally due until the principal is paid back.
(DR).
1. In relation to a bank account, a debit balance 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.)


Some debentures are interest free.
2. An item drawn out of an account, or charged against the account.


3. In double entry book-keeping, every accounting transaction is recorded with both a Debit entry and a Credit entry in the accounting records. 
Debit balances represent assets or expenses (while Credits represent liabilities, capital or income).
4. In double entry book-keeping a Debit entry is one made:
- To increase a debit balance; or
- To reduce a credit balance.
For example, the book-keeping entry to recognise a cash sale is:
DR Bank
CR Income
If the bank balance is already an asset (DR balance in the account holder's records), the DR Bank accounting entry for the receipt will increase the positive bank balance (asset) in the balance sheet.
But if the bank balance is currently overdrawn, then the DR Bank accounting entry for the receipt will reduce the overdrawn bank balance (liability) in the balance sheet.


== See also ==
== See also ==
* [[Bond]]
* [[Credit]]
* [[Building a Debt IR function]]
* [[Debit balance]]
* [[Debt]]
* [[Direct debit]]
* [[First mortgage debenture]]
* [[Double entry]]
* [[Floating charge]]
* [[Net credit/debit position]]
* [[Floating charge debenture]]
* [[Receiver]]
* [[Secured debt]]


[[Category:Compliance_and_audit]]

Revision as of 14:19, 23 October 2012

(DR). 1. In relation to a bank account, a debit balance 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.)

2. An item drawn out of an account, or charged against the account.

3. In double entry book-keeping, every accounting transaction is recorded with both a Debit entry and a Credit entry in the accounting records. Debit balances represent assets or expenses (while Credits represent liabilities, capital or income).

4. In double entry book-keeping a Debit entry is one made:

- To increase a debit balance; or
- To reduce a credit balance.

For example, the book-keeping entry to recognise a cash sale is: DR Bank CR Income

If the bank balance is already an asset (DR balance in the account holder's records), the DR Bank accounting entry for the receipt will increase the positive bank balance (asset) in the balance sheet. But if the bank balance is currently overdrawn, then the DR Bank accounting entry for the receipt will reduce the overdrawn bank balance (liability) in the balance sheet.

See also