The connection between borrowing and lending How to understand borrowing and lending in layman s ter

The so-called "borrow" and "credit", don't think so much about it when making accounts, they are just a kind of bookkeeping symbols.

If you are majoring in accounting, then you must know the six categories of accounting. (Assets, Liabilities, Owners' Equity, Costs, Revenues, and Expenses), where assets, costs, and expenses are debited to increase and debited to decrease. Liabilities, owners' equity, and income are debited and credited to increase.

Here you must memorize these subjects in order to use them flexibly, and it is useless to rely on other people's explanations.

The so-called cash check refers to the cash withdrawal directly from the bank after filling it out. That's when bank deposits are reduced. then do.

Borrow: Cash. Credit: Bank Deposits (They both belong to the same asset class, one asset increases, one asset decreases.) ）

The so-called transfer check refers to the transfer of the cheque from your bank to someone else's bank after it is completed. For example, if your company buys other business materials (goods) and scrapes money directly from the bank to him. then do.

Borrow: Raw materials (or goods in stock).

Credit: Bank deposits.

Bank checks are an overarching concept.

Both the cash journal and the bank deposit journal are records of the cash and bank deposits that occur on a daily basis, and are accumulated clearly on the same day. Cash and inventory reconciliation.

When cash and bank deposits occur at the same time, as long as the credit is on the journal.

If you want to learn well, the most basic thing is to do more questions and read more books.

Where there is borrowing, there must be a loan. Borrowing and debiting must be equal, which is the accounting rule of the debit accounting method. The debit side reflects an increase in the tie-up of funds. Lenders reflect a decrease in capital tie-up. Lenders reflect an increase in funds**. The debit side reflects a decrease in funds**.

And cash checks and transfer checks, bank checks are not a concept.

When using a cash check to collect cash. Should do: borrow: cash loan; Bank deposits.

Cash and bank deposits are both asset accounts. Increased cash. Bank deposits decreased.

in the accounting sense"Borrow"with"credit"Don't take it literally.

Think of it as a symbol.

Increases in assets and expenses are credited to debits, and decreases are credited.

Liabilities, owners' equity, revenues, and profits are credited to the credit side, and decreases are credited to the debit side.

It has little to do with a bank check, which is just a means of paying the fee, and of course a cash check can be withdrawn.

The cash journal and the bank deposit journal are just journals that record the changes in cash flow and bank deposits, respectively.

Agree with the point of view upstairs, speak very clearly and carefully!

In day-to-day borrowing, borrowing means borrowing in and lending out. That is, the person who borrows the money is called the borrower, and the person who is borrowed is called the lender. In accounting accounts, debit and credit are only a kind of bookkeeping symbols, which have no real meaning, such as the increase of assets, liabilities and owners' equity.

the reduction of debits; Decreases in assets, increases in liabilities and owners' equity are credited.

Extended Materials] 1. "Borrow" and "Loan".

"Debit" and "credit" are used as accounting symbols, "debit" is used to indicate the increase of capital occupation and decrease of capital **, and "credit" is used to indicate the increase of capital ** and decrease of capital occupation. Accounting.

Debits and credits have no practical meaning and are only used as symbols for bookkeeping; In general, the "debit" is on the left side of the account; "Credit" is on the right side of the account. Debit bookkeeping.

It is a type of double-entry bookkeeping. It is an accounting equation with "debit" and "credit" as accounting symbols and "assets and liabilities + owners' equity".

As a theoretical basis, it is a scientific double-entry accounting method with "there must be a loan, and the loan must be equal" as the accounting rule.

2. The difference between borrowing and lending.

The debit side indicates an increase in assets, an increase in the opening and closing balances of assets, a decrease in liabilities, a decrease in owners' equity, an increase in expenses, and a decrease in income. The credit side indicates the increase in liabilities, the opening and closing balances of liabilities, the increase in owners' equity, the opening and closing balances of owners' equity, the decrease in assets, the decrease in expenses, and the increase in income.

3. Loan bookkeeping.

Under the debit accounting method, all accounts are structured in such a way that the left side is the debit side and the right side is the credit side, but the debit and credit sides reflect the accounting elements.

The increasing and decreasing nature of quantitative changes is not fixed. Danliang accounts of different natures, the content registered by the lender is different, and the structure of each type of account is explained below.

1.The structure of an asset class account.

In an asset class account, its debit side records the increase in the asset, and the credit side records the decrease in the rent of the asset. in the same accounting period.

year, month), the total amount of the debit record is called the current debit amount, the total amount of the credit record is called the current credit amount, and the difference between the debit amount at the end of each accounting period is called the closing balance. The closing balance of an asset class account is generally on the debit side. The closing balance of an asset class account can be calculated using the following formula:

Closing Balance (Debit) = Opening Balance 10 Debit Amount of the Current Period 1 Credit Amount of the Current Period.

2.The structure of the liability account and the owner's equity account.

Liabilities and owners' equity accounts are structured in the opposite way of assets, with credits recording increases in liabilities and owners' equity; The debit side records the reduction in liabilities and owners' equity, and the closing balance should generally be on the credit side. The closing balance of the liability account and the owner's equity account can be calculated according to the following formula: closing balance (credit) = opening balance 10 current credit amount - current debit amount.

The difference between borrowing and lending in finance is:

1. The opening balance of asset accounts is generally on the debit side, with the debit side indicating an increase and the credit side indicating a decrease. However, except for allowances and additional accounts, such as bad debt provisions, inventory decline provisions, fixed assets impairment provisions and other asset impairment provisions, because they are allowances, the opening balance is on the credit side, the credit side indicates an increase, and the debit side indicates a decrease.

Another example is the difference between the purchase and sale of commodities and the difference in material costs, which are additional accounts for allowances, which need to be based on the economic substance of the enterprise, which may increase the debit side, decrease the credit side, or vice versa.

2. Liabilities and owners' equity are the opening balance on the credit side, the credit side indicates an increase, and the debit side indicates a decrease. Income is similar to liabilities, with the credit side indicating an increase and the debit side indicating a decrease, but there is no opening number. Costs are similar to assets, with debits indicating an increase, credits indicating a decrease, and no opening number.

And profit is revenue-cost.

3. After understanding this bookkeeping principle, the balance is easy to judge, the balance of the current period = the opening balance + the increase of the current period - the decrease of the current period. Take the asset as an example, it is the opening debit balance + the current debit amount - the current credit amount = the closing balance, if it is a positive number, then it is a debit, if it is a negative number, it is a credit.

Bookkeeping method: 1. Debit: bank deposit 200,000

Credit: Paid-in capital 200,000

2. Borrow: 50,000 bank deposits

Credit: Short-term borrowing 50,000

3. Borrow: fixed assets - machinery and equipment 20,000

Credit: bank deposit 20,000

Difference Between Loan and Borrowing.

1. Three Principles of Loans:

The "three principles" refer to safety, liquidity, and efficiency, which are the fundamental principles of commercial banks' loan operations. Article 4 of the Law of the People's Republic of China on Commercial Banks stipulates that: "Commercial banks shall operate independently, bear their own risks, assume their own profits and losses, and exercise self-restraint based on the operating principles of safety, liquidity and efficiency.

1. Loan security is the primary issue faced by commercial banks;

2. Liquidity refers to the ability to lend according to a predetermined term, or quickly realize the ability to cash out without loss to meet the needs of customers to withdraw deposits at any time;

3. Efficiency is the basis for the continuous operation of the bank.

For example, if a long-term loan is issued at a higher interest rate than a short-term loan, the efficiency is good, but the loan term is longer, the risk increases, the security decreases, and the liquidity becomes weaker. Therefore, there must be harmony between the "three sexes" so that there will be no problems with loans.

2. Two definitions of borrowing:

It refers to the funds borrowed by enterprises from banks and other financial institutions and other units, including credit loans, mortgage loans and trust loans.

Borrowing can also refer to the funds borrowed by a person from financial institutions such as banks and other units and individuals, including credit loans, mortgage loans and trust loans.

Borrowings are also divided into long-term and short-term borrowings.

Long-term borrowing refers to the borrowing of an enterprise from a bank or other financial institution with a term of more than one year (excluding one year). The long-term loans of China's joint-stock enterprises are mainly long-term loans borrowed from financial institutions, such as loans obtained from various professional banks and commercial banks; In addition to this, it also includes money borrowed from financial companies such as finance companies and investment companies.

1. Borrowing means: the increase of assets; an increase in fees; reduction of liabilities; reduction in owners' equity; Decrease in revenue and profit. 2.

Credit indicates: a decrease in assets; reduction of costs; increase in liabilities; an increase in owner's equity; Increase in revenue, profit.

Debits and credits can actually be explained in terms of things. For example, if A has an item, B does not have it, and B wants or wants to use the item, then it can only borrow from A. Find someone to borrow something, you are the subject, so B is the borrower.

A was very angry and borrowed this thing, and this thing is now in B's hand, but from the point of view of all the things, although the thing is in B's hand, the thing is still A's, and it is only lent out. Replace what is lent here with money, A is the credit and B is the debit. In a word, whoever loses something is the lender; Whoever gets something is a debit.

It is important to note that you must keep the evidence of the loan, especially the loan between relatives. Loans between relatives are sometimes only verbal agreements, and such oral agreements are dangerous if they are not supported by written information. For example, some people don't want to repay after borrowing, so this kind of verbal agreement has no legal constraints at all, so when a loan relationship occurs, no matter how good the relatives are, out of their own interests, they must also keep the evidence of the loan.

The asset accounts are different, the liability accounts are different, and the equity and profit and loss accounts are different and the same are known.

I don't think it makes sense to understand the difference in terms of the meaning of borrowing. Now borrowing is just a sign and a mark, that is, a symbol that conceals the two different signs. Just like the positive and negative poles of a battery, we stipulate that electrons flow from the negative electrode, and the direction of the current is from the positive electrode to the negative electrode.

Similarly, we also stipulate that an asset represents an increase in assets on the debit side and a decrease on the credit side. That's all, the symbol works.

In fact, you can understand it this way, borrowing is the result of the use of funds, and lending is the use of funds. This applies to assets, liabilities and owners' equity.

For example, if you open a cake shop and buy 40,000 raw materials, but the payment is owed to the seller (**merchant). This money, 40,000 raw materials is the result of the use of funds, and the payment owed to the merchant is the first of the funds. When I remember it, it is:

Borrow: Raw materials 40000

Credit: Accounts payable 40000

Because in this transaction, the funds used to buy raw materials are inflowed from the outside (money owed to the ** merchant), so in the accounting, the assets are +40,000 and the liabilities are also +40,000;Funds circulating within assets are also recorded in this sense of debit and credit. When remembering, debit first, and then credit.

The emergence of debits and credits is derived from the debit bookkeeping method. The credit and debit accounting method refers to a double-entry accounting method that uses the accounting equation as the bookkeeping principle and the debit and credit as the accounting symbols to reflect the increase and decrease of economic business. With the development of commodity economy, the credit and loan accounting method has been widely used, and the object of accounting is no longer limited to creditor's rights and debts, but has been expanded to record the increase and decrease of property and materials and calculate operating profits and losses.

The accounting symbol is a sign used to determine that the economic transaction that occurs should be recorded in a certain direction of the account. Different bookkeeping methods have different accounting symbols. Accounting notation is an important feature that distinguishes one accounting method from another.

Further information: Loan is a form of credit activity in which a bank or other financial institution lends monetary funds at a certain interest rate and on the condition that it must be returned. Loans in a broad sense refer to the general term for loans, discounts, overdrafts and other lending funds.

By lending money and monetary funds to the bank, it can meet the needs of the society for supplementary funds for expanding reproduction and promote economic development.