Why is an increase in revenue/income listed as a credit?

Question

I know this is the case, i'm just starting out with accountancy and cant get my head around the basics ...

Answer 1

The term "credit card" is not helpful; when you use it you go into debt.

Answer 2

It comes from Latin.  "Debit" comes from "debere," meaning "to owe."  "Credit" comes from "credere," which means "to believe" or "to entrust."

So a credit is an amount of money that's yours, that you can put faith in.

I took one accounting course, and it took me forever to get this concept, too, so I took a notecard and wrote "CREDIT: INCOME / DEBIT: EXPENSE" and taped it to my desk so that every time I was working on accounting homework, it'd be there staring me in the face.  It helped; within a week or so I'd gotten it solidly.

Answer 3

Credit is something added, extended or gained. A debit is something taken away or lost.

Answer 4

its a common problem when first starting out.

It tends to be because our minds are used to the way banks work whereby a credit is something coming out of your account (ie an expense).

Answer 5

It's called double entry bookkeeping.  The debits have to equal the credits because that's how the system works.

Debit Cash (making it go up), Credit Income

Debit Expenses, Credit Cash (makes it go down as you use it).

  

Answer 6

Because in accounting the word "credit" refers to any money that comes to you in any way, shape or form.