On Sun, 30 Apr 2000 17:17:01 CDT, the world broke into rejoicing as
Richard Wackerbarth <[EMAIL PROTECTED]> said:
> On Sun, 30 Apr 2000, ich wrote:
> > John Hasler wrote:
> > > IMHO the only reason negative numbers should
> > > ever appear on the screen is to indicate that something is "backwards",
> > > as when you overpay a bill and consequently have a debit balance in an
> > > account payable.
> I agree. When debits are posted to a debit account, they are "positive"
> entries -- they increase the total. When credits are posted to the same
> account, they are "negative" -- they decrease the total.
> Similarly, for credit accounts, things are reversed; debits decrease the
> total and credits increase it.
>
> When I talk about income and expenses, I do so in the "positive" (not
> necessarily "good") manner. I earned income of $1000 and had expenses
> of $800.
>
> > > Even this could be avoided by use of the parenthesis
> > > favored by bookkeepers or the canonical debit-credit T account notation.
> "negative" entries are NOT the same as debit-credit.
>
> You can have "negative" credits. For example, (unless I have it backward)
> income is a credit account. When I earn some income, I debit the bank account
> and credit the income account. Income credits are "good". One form of income
> is the sale of an asset. I debit the bank and credit the asset account. To
> balance the transaction, I also credit "capital gains" for the profit.
>
> However, if I actually had a loss, it can be viewed that I credit "capital
> gains" with a negative amount.
>
> As for the display of accounts, "minus signs", parenthesis, and "red ink" are
> all proper methods of displaying a number that is "backward".
> T-accounts have nothing to do with this.
>
> Normal accounting procedures do not mix assets, liabilities, income, and
> expenses. There is a separate section for each of them. It is only when we
> attempt to combine, for example, income and expenses on the same report
> that we have a problem.
Wrong answer.
Normal accounting procedures _do_ mix assets, liabilities, income,
and expenses. (Oh yes, _and equity._)
a) In the general ledger, where an account is just an account.
b) In the trial balance, where, again, an account is just an account.
They are _not_ distinct in the way you are suggesting they are distinct.
--
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"Here's a nickel, kid. Get yourself a real computer" - Dilbert.
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