Credit

From Economypedia.com

Credit denotes the borrowing of money by one party from another which is returned at a specified time in the future. A contractual agreement is drafted that determines the amount of money to be credited to the borrower and the date on which the amount is to be repaid. The amount credited is determined according to the capacity of the individual or the company borrowing the money. Interest is also charged for the amount credited by the bank or lender.

Credit also refers to an accounting entry in the balance sheet of the company that increases the liabilities and equity or decreases its assets.

Contents 1 Debit 2 Asset 3 See also 4 Further reading

[edit] Debit

Debit reduces the net income of the company according to its income statement, credit increases the net income.

[edit] Asset

Asset denotes the economic benefits that are gathered from a particular entity in the future through transaction made in the past.

[edit] See also

• Credit crunch
• Lending
• Borrowing
• Leverage
• Gearing
• Interest

[edit] Further reading

Article about credit cards in Economywatch.com