Nonprofit Accounting Question:

Define the word credit mean in terms of accounting?

Nonprofit Accounting Interview Question
Nonprofit Accounting Interview Question

Answer:

The word "credit" is part of the equation of double entry bookkeeping.
In order for bookkeeping entries to balance, there must always be a debit (left side, abbreviated by "dr") and credit (right side, abbreviated by "cr") entry that equal one another.

For example, to record an Office Supply Store purchase (on account ~ a payable), the entry would be:
Office Supplies Exp $500.00(dr)
Accounts Payable $500.00(cr)

If an entry does not balance the totals for debits and credits, your books will be out of balance.


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