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February 16, 2009

What is the difference between a debit and a debit balance?

A debit is an entry on the left side of an account. For example, the account Cash is debited when cash is received. The account Cash will be credited when cash is paid out. (A credit is an entry on the right side of an account.)

If a company’s Cash account has $394,000 of debit amounts and $392,000 of credit amounts, the Cash account will have a debit balance of $2,000. Most asset accounts and expense accounts will have debit balances.

If the Cash account had $394,000 of debit amounts and $395,000 of credit amounts, the Cash account will have a credit balance of $1,000. This indicates that it has a negative amount of cash—that the amount of checks written is greater than the money it has received. If a bank deposit is not made prior to its checks clearing the bank, the company’s bank account will overdraw.

Learn more about Debits and Credits.

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Comments

13 Responses to “What is the difference between a debit and a debit balance?”

  1. Amir Amoona on February 18th, 2009 1:16 am

    I appreciate if you can help me out.
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    Thanks You
    Amir Amoona

  2. What is the difference between a debit and a debit balance? « Online Accounting Blog on February 24th, 2009 5:06 pm

    [...] If a company’s Cash account has $394,000 of debit amounts and… keep reading [...]

  3. kushi on February 27th, 2009 5:54 am

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  6. Asifa on March 4th, 2009 1:46 am

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  7. DONALD CHGAVAZIRA on March 4th, 2009 7:02 am

    i am very glad about the information you had provided. in future i want to know the difference btwn a wage and a salary
    and a goal and an objective

  8. Samantha on March 24th, 2009 12:30 pm

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  9. mishi(yasmin) on May 11th, 2009 12:39 pm

    goal and objective both are relate to each other
    like,goal always fix and obj vary on the bases of goals,how
    the goal of asdf company is to earn $25in 6 month by the sale of x product this is goal ,now objective may change like u may easrn $1 or $2 it means sale can be change but u have to acheive goal that is $25
    sale may be change because of season or by the different factor but goal can not b/c it is fix n company has decided now the company will acheive the goal.
    now wages n salary
    wages is 4 one weak or 10 days but it is not for the full month if labour does the work 4 one moth so the company or any organization ,thay will give some amount that is salary not wages.
    mishi(yasmin)

  10. tammy on June 5th, 2009 4:10 am

    In the Balance sheet, the external borrowing will appear negative figures ma? why?

  11. Noeline on July 5th, 2009 7:41 am

    fantastic website…. Really help fulll!!!!

  12. awil on August 8th, 2009 6:23 am

    what is financial statment

  13. Jennifer on September 30th, 2009 3:11 pm

    I need help with credit and debit when it come to Journal entry( day book)

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