Dealing with bank for none accountants DR/CR

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Dealing with bank for none accountants DR/CR

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Hi,
If you are not an accountant and you have to deal with bank related to your bank account and you are confused with DR/CR (Debit/Credit) terminology then you should reach this topic. In this topic I will try to explain in a very simple way so you will remember while dealing with bank. Here are few questions you may face and you want to understand these in a simple way,

1 - What is this if bank will tell me your bank account is debited?
2 - What is the meaning if account is credited?
3 - What I should say or write to bank if I have to deposit money in my account Debit/Credit?
4 - What if I need to withdraw from my account Debit/Credit?

Always remember while dealing with bank you have to think from the bank side as that is not your internal account. So treatment with your transactions will be from bank side.

Second thing to remember is Debit is always on LEFT side and Credit is on Right Side,

Left Right
Debit Credit
- +

now while dealing with your bank account or bank consider your left as negative for you means money going out from your bank and Right is positive and amount is deposited to your account. This rule is only for your bank account not your internal accounting books.

Now based on above logic let us answer the above 4 questions,

1 - What is if bank will tell me your bank account is debited?
It means you need to withdraw (take money) from your account and it is left side so minus for you.

2 - What is the meaning if account is credited?
If you account is credited that means cash is deposited into your account so favorable.

3 - What I should say or write to bank if I have to deposit money in my account Debit/Credit?
Depositing in your account is Right thing for you so it is Credit to your account.

4 - What if I need to withdraw from my account Debit/Credit?
Withdraw is not good and not in your favor as balance will go down so it is negative and left side is Debit so it is Debit.

Now try to do few sample transactions and also next time try to understand your bank statements. In your bank statement your Debit will be withdrawals and credits will be your deposits. So your salary amount will be Credit and any payments will be Debit.

Note: The above logic applies only while you are dealing with you bank account.

Hope the above will help you to understand easily your bank statement and Debit/Credit of your bank account.

Thanks
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