http://www.quickmba.com/accounting/fin/equation/
The reason I hit that is because, to me, everything is a confused muddle until the fundamental account equation is written out and explained. After that, I can slowly but successfully figure out the credits and debits stuff.
I think "from the bank's perspective" may be vaguely true but it only increases frustration. Laying out the "resources and the claims against the resources", to me at least, better explains why debit accounts exist.
So, basically my suggestion is to either start with the accounting equation and work from there or not attack the subject at all and just point to some good places on the web with a comment like "for those who are brave and curious".
On Aug 11, 2004, at 3:53 PM, Herbert Thoma wrote:
Jon Lapham schrieb: < ... >Thus, money deposited into your personal savings account (an asset account from your perspective) goes in the debit column because the account is considered a liability from the bank's perspective. Wow.
Do we really want to get into all of this? I imagine this confusion is
the reason why the "credit" and "debit" column of GnuCash have all been
renamed (ie: renamed to "Deposit" and "Withdrawal" for a savings account).
Well, there is an option "Use accounting labels" under edit->preferences->accounts. If you select this option then you get "credit" and "debit" everywhere for the professional accountant. If you don't select the option then you get the more common column lables ...
Herbert.
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