Financial Glossary
Credited and Debited (Banking)
In everyday banking, an account is credited when money is added to it and debited when money is withdrawn from it. This is the bank's view of your account, which is the opposite of how the same words appear in a business's own books, where a customer deposit may be recorded differently because the bank treats your balance as a liability it owes you. The terms appear on statements as credit and debit transactions to show inflows and outflows.
Problem & Application
Owners reconciling their books to bank statements often get tripped up because credited and debited on the statement run opposite to the debits and credits in their accounting system. Knowing that a bank credit is cash coming in and a bank debit is cash going out prevents mis-categorizing transactions during reconciliation. This is especially common when matching merchant deposits, refunds, and automatic withdrawals across many small bookings.
In Short
On a bank statement, credited adds to your balance and debited subtracts from it, regardless of how the terms behave inside double-entry bookkeeping. Keeping the two perspectives straight is key to clean reconciliations.