Solution Matrix • Cost-Benefit-Analysis

Credit (CR)

Credit generally refers to loans, open account balances with creditors, and other financial obligations. In this sense, credit can also refer to an unused ability to acquire these obligations.

In bookkeeping and accounting, however, a credit (CR) is the act of making an entry that decreases assets and expenses, or which increases liabilities, owner’s equities, and revenues. The accounting transaction opposite to a credit is a debit, (DR) and it is a fundamental rule of accounting (part of the accounting equation ) that for every transaction

Debits = Credits

Finally, in popular usage, credit can mean simply an adjustment in a customer’s account, in the customer’s favor (as in, "We have credited your account for the amount of ...").

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