Pay salaries - credit bank?

by Hussain
(Dubai - UAE)

When we pay salaries to the staff, why are we crediting the bank?

Hussain, thank you for your question. Remember that the bank account is an asset - something that will bring you or your business benefits in the future. According to the accounting equation, assets occur (and increase) on the left side. They decrease on the right side - the credit side. So a credit to bank means less money. For more help on this, see the lesson containing the asset example in the section on Basic Transactions and also in the section Debits and Credits.