What Is a Debit Ticket?
A debit ticket is an entry by a bookkeeper or an accountant that indicates a sum of money that is owed but not yet paid by the business. It reduces the balance of the general ledger by that sum. When payment is received a corresponding credit is entered to cancel the debit.
This may be contrasted with a credit ticket, used to indicate a payment or deposit that is expected or that has been received but not yet cleared by a bank. When the cash is available, it is entered as an asset and the credit ticket is canceled.
- A debit ticket is an accounting placeholder representing an amount owed by an organization or individual.
- A debit ticket indicates that a transaction is incomplete until a corresponding credit ticket can be matched to balance the ledger.
- When completed, a credit is entered to cancel the debit. This type of reconciliation is a key part of double-entry bookkeeping.
Understanding Debit Tickets
A debit ticket is used as a placeholder on the books. It assumes that the payment will be made in the near future and the books will balance. Banks routinely use debit tickets and credit tickets to record transactions by their customers before the transaction is processed. A check written by a customer is recorded as a debit ticket until the transaction clears. A check received is recorded as a credit ticket until it clears. This is an example of double-entry bookkeeping.
General ledgers are an important part of accounting and bookkeeping because they serve as the record-keeping system for corporations as well as individuals. They also provide valuable information companies require in order to draw up their financial statements. Information about the entity's assets, liabilities, expenses, income, revenue can all be found on a general ledger. Data is organized by credits—financial entries coming into the business—and debits—money that is going out. The running balance is updated with every entry.
A debit ticket is an entry used in both accounting and bookkeeping that indicates money or assets that are owed by a company or individual. Adding them to the general ledger decreases its net balance. Therefore, a debit ticket represents a transaction in the general ledger that deducts money from the account. In the past, debit tickets came in the form of physical documents or paper tickets until the canceling credit ticket arrived to balance the books. Today, such placeholders are represented electronically using accounting software and digital ledgers.
Example: Debits and Credits
An accountant using double-entry bookkeeping keeps two separate lists of entries: one listing debits and the other listing credits.
Let's say that a business spends $1,000 on a new piece of equipment by writing a check. That activity is recorded with a debit ticket recording a $1,000 expenditure that has been spent on the. equipment. Subsequently, the firm will record a a credit of $1,000 for the equipment when it is received, which is then listed on the balance sheet as an asset of the business.