Interpreting “Your Account Has Been Credited” on a Bank Deposit Receipt
The main purpose of this teaching resource is to enable students to understand the rules for debits and credits that are summarized in Exhibit 2. Many students are predisposed toward misunderstanding the effect of debits and credits on assets and liabilities. The reason is that they misinterpret what is meant by the words on their receipt when they make a deposit into their bank account. When depositors read, “Your account has been credited,” most assume that the words indicate that Cash has been credited. They are inclined to think that an increase to Cash or any other asset is recorded as a debit.
This article is from the Accounting Instructors’ Report, an electronic journal that provides teaching tips and insights to those who teach accounting and other business courses.
Daniel Jones, Assumption College