Why are Debits & Credits BACKWARDS?

🆓Debits and Credits Free Quiz → accountingstuff.com/blog/debi...
💥Debits and Credits Cheat Sheet → accountingstuff.com/shop
🖊Debits and Credits Practice Questions → accountingstuff.com/practice-...
Have you ever been puzzled by the reversal of debits and credits in certain situations?
For example, when you deposit cash into your checking account the bank credits your balance. But in accounting, we know that cash is an asset. A normal debit account. So debits should increase a cash balance and credits should decrease it.
Dive into this video to unravel this mystery!
🔴Subscribe for more Accounting Tutorials → geni.us/subtothechannel
🔎FAQ
▪ My Favourite Accounting Book for Beginners → geni.us/5mKR7m
🎬LEARN ACCOUNTING BASICS FOR FREE
▪ The Full Playlist → • ACCOUNTING BASICS for ...
🔝 CLOUD ACCOUNTING SOFTWARE
▪ QuickBooks Online USA (FREE TRIAL/DISCOUNT) → geni.us/jA9N
▪ QuickBooks Online Canada (FREE TRIAL/DISCOUNT) → geni.us/bNN7
▪ Xero (FREE TRIAL) → xeroamericas.grsm.io/ck90eoq1...
🚶FOLLOW ME ON
▪ Instagram → / accountingstuff
▪ TikTok → / accounting_stuff
▪ Facebook → / thisisaccountingstuff
________________________
DISCLAIMER
Some of the links above are affiliate links, where I earn a small commission if you click on the link and purchase an item. You are not obligated to do so, but it does help fund these videos in hopes of bringing value to you!
________________________
#Shorts #accountingstuff

[@rutheshkumar7574]

I had this doubt for a very long time, but I was afraid to ask someone for fear that they would make fun of me for not knowing this obvious information. Thanks to your videos, I was able to learn accounts with ease. Maintain your wonderful effort, man. Cheers.

[@jackquelinejuat5657]

Sameeeee, I was in this situation bfore😅

[@rossbriannestein5054]

This guy's videos helped me get through my college accounting classes. Super helpful.

[@chris11783]

Brilliantly explained!

[@AccountingStuff]

Thanks!

[@liamkeaneycomp]

I can tell this has been explained as simply and easily as it can be… but sadly I still don’t get it. Though I’m sure that has more to do with my brain not being very accounting-savvy

[@The_ChosenLady]

You don't have to feel bad, if you really love accounting, let that love give birth to passion and repeat it as much as you can till you get it. But if you do not love it, go for what you love and what you consider the best for you.

[@user-xv9bh7ij7p]

man it's debit for you but for bank it's credit so they are saying credit because they are bank simple

[@brianmuzumi6945]

Think of your account as a liability to the bank and the cash in your account as an asset to them. When you open an account with them,they now have a liability to you because they owe you money,so each time you deposit money,the liability grows bigger and each time you withdraw from your account,their liability grows smaller and smaller,,,in accounting,to reduce a liability on a balance sheet, you have to debit the liability acvount and to increase it,you credit it,which is why they debit your account(the liability to them on their bs)when you withdraw and credit your account(the liability on their bs)when you deposit,the liability increases again on their sheet😅hope this helps

[@kuwusa22]

Perfectly explained! Thank you!

[@AccountingStuff]

Thanks!

[@jaegar1nine266]

Hence why banking is a waste of money and time. They take your money and declare it theirs. Since they effectively take your money and then fail to give you ANY interest on it, just pull your cash whenever possible.

[@kitsomautle9954]

The mistake students often do is to assume that they are only dealing with their company books.

[@casshernsins8333]

Fucking thank you. Something so simple that’s overlooked by many accounting students

[@marlanabeasley1790]

So good! Ty for this !!

[@AccountingStuff]

You're very welcome :)

[@IrebamiDaniel]

Wow I love this summary❤ 🔥🔥🔥. I understand better now

[@brianmuzumi6945]

Think of your account as a liability to the bank and the cash in your account as an asset to them. When you open an account with them,they now have a liability to you because they owe you money,so each time you deposit money,the liability grows bigger and each time you withdraw from your account,their liability grows smaller and smaller,,,in accounting,to reduce a liability on a balance sheet, you have to debit the liability acvount and to increase it,you credit it,which is why they debit your account(the liability to them on their bs)when you withdraw and credit your account(the liability on their bs)when you deposit,the liability increases again on their sheet😅hope this helps

[@BimmerBabe]

Wow! That make so much sense

[@keshabsarkarvlogs654]

Love from India I am doing Commerce BCom Hns Want to do CA in future ❤🎉

[@AccountingStuff]

Best of luck with your studies!!

[@patmoran1743]

Any chance you could do a video regarding tax on properties?

[@ganeshgadekar9234]

Thanks a lot, Crystal Clear now.. How retained earning connected to Net Profilt/Loss?

[@patmoran1743]

The profit and loss at the end of a financial period is ‘transferred’ to the retained earnings so it can be carried forward 👍🏻

[@djshipman8839]

It's actually an Accounting trick. You see the bank just keyed the amount you gave them into their system. However, the money you give to them will be put to good use for funding their own investment account where they'll earn interest on it. 😂

[@josephinemanda1797]

great

[@dudeb5610]

Thank you

[@AccountingStuff]

You're welcome :)

[@user-iu2bh4hd7t]

😮😮 thank you

[@AccountingStuff]

You're welcome :)

[@priyadharshan4640]

Haan thats the reason we learnt bank reconciliation statement even though its outdated

[@vishnubabu4402]

😂we should keep a bank account in our books

[@nirajthakor9748]

But sir some of people say that debit and credit keep their individual meaning in general or for non ledge person...Is there anything like that?? I sometime think when we make payment with upi then Bank gives us a message that "Money has debited from this account and credited to this account" now my question is how bankers post entry? Do they really credit someone's account?

[@AccountingStuff]

The banker would tell you the Debits & Credits from their point of view

[@nirajthakor9748]

@@AccountingStuff Okay then your one answer could be so helpful for this concept generally debit balance means we have assets wnd it's positive sign of it and the same if i have money in my bank account then what could i say? *I HAVE DEBIT BALANCE IN MY ACCOUNT OR I HAVE CREDIT BALANCE IN MY ACCOUNT* i know bank will see in their perspective but but at least i have to see in my point of view so i assume debit balance but i know you'll say that credit balance is correct answer but still I don't know the logic 🙌

[@AccountingStuff]

@@nirajthakor9748 If you have Cash in your account then from your point of view you have a Debit balance. But the Bank Statement will show a Credit balance because it's written from their point of view.

[@nirajthakor9748]

@@AccountingStuff Sir i all understand but if day to day life i have to say to someone that i have cash in my account... Suppose i have to say to my brother that yes i have some cash in my account so what would be the correct one? Debit balance or credit balance? I mean people generally who isn't into business and have just bank account so what he or she will say ? Credit balance or debit balance?

[@AccountingStuff]

@@nirajthakor9748 In that case, wouldn't you just say that you have cash in your bank account? No need to dive into Debits and Credits which could confuse things

[@34faeli]

If what you're saying is true, the bank owe us a lot of money dude

[@AccountingStuff]

🤣

[@34faeli]

@@AccountingStuff subscribed 🤓📓

[@AccountingStuff]

Great to have you on board!@@34faeli