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In bookkeeping why are revenues credits ?

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Question added by Syed umer imam , cashier , Majid Al futtaim
Date Posted: 2015/08/19
Badar Khan
by Badar Khan , Accounts cum administrative assistant , Al Qassimia Drivng Training Centre.Sharjah

whenever revenue  increases it is credited

Deleted user
by Deleted user

BECAUSE REVENUE INCREASE OWNER EQUITY THAT IS WHY IT IS CREDIT

Deepak Walia
by Deepak Walia , Commercial Manager , Biosafe Lab India P Ltd.

There r two types only one is for debit means from whom we need to get or collect back, another side is credit means already collect in shape of liability, accounts, invoices etc.

Muhammad Afaq
by Muhammad Afaq , SENIOR FINANCIAL ACCOUNTANT , United Eddy Company (United Yousef M. Naghi Group)

As all forms of liabilities are being booked as credit. So Revenues or sales is also a liability as containing profit element in it, and that profit is liability of the company towards its equity holders or partners.

Deleted user
by Deleted user

In bookkeeping, revenues are credits because revenues cause owner's equity or stockholders' equityto increase.Recall that the accounting equationAssets = Liabilities + Owner's Equity, must always be in balance. The asset accounts are expected to have debit balances, while the liability and owner's equity accounts are expected to have credit balances. Therefore, when a company earns revenues, it will debit an asset account (such as accounts receivable) and will need to credit another account such as Service Revenues. The credit balance in Service Revenues will eventually be moved to the sole proprietor's capital account or to a corporation's Retained Earnings account (thereby increasing the credit balance in one of those owner's or stockholders' equity accounts).

Aqid Hussain
by Aqid Hussain , Internee , State Bank of Pakistan - Banking Services Corporation

All the incomes generated by the business are credited upon realization. Furthermore, owing to the separate owner entity, the incomes realized held the business liable to pay the income to the owner who have the right on it. Since, all the liabilities are credited when increased, increase in income is also credited.

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