Credit
A credit is an entry on the right-hand side of a ledger account. Credits normally increase liabilities, equity and income, and decrease assets and expenses. Its effect depends on the type of account, not whether the transaction is favourable. Under double entry, total credits must equal total debits for each complete transaction.
Worked example
A $900 credit sale is recorded by debiting receivables $900 and crediting revenue $900. Receiving payment later credits receivables.
Common mistake
Credit does not always mean money received: crediting bank usually reduces the business’s bank asset.
Where it appears in your exams
| Qualification | Exam | Relationship | Period |
|---|---|---|---|
| ACCA | F1 | Direct | July 2027–August 2028 |
| ACCA | F2 | Direct | July 2027–August 2028 |
| ACCA | FA | Direct | September 2026–June 2027 |
| ACCA | K1 | Direct | July 2027–August 2028 |
| CIMA | BA3 | Direct | Official assessment-window verification pending |
| FIA | FFA | Direct | September 2026–June 2027 |