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Credit (Cr) is a fundamental accounting entry that used to increases the accounts of Liabilities and Equity, or to decrease Assets and Expenses.
It is positioned to the right side in an accounting entry. On other hand, debit (Dr), positioned to the left side in an accounting entry and work to balance of the accounting entry.
Credit will increase these accounts:
- Liabilities (Notes Payable, Accounts Payable, Interest Payable, etc.)
- Equity (Common Stock, Retained Earnings)
- Revenue (Income).
On other hand Credit will decrease these accounts:Â
- Assets (Cash, Accounts Receivable, Inventory, Land, Equipment, etc.)
- Expenses (Rent Expense, Wages Expense, Interest Expense, etc.)
- Losses (Loss on Sale of Assets, Loss from Lawsuit, etc.)
