Hi folks, In puzzling over Debits increasing some accounts, while Credits increase others, I stumbled over an explanation that I hope will help me and others trying to learn accounting better than by remembering DEADCLIC or DEALS/ GIRLS, etc.- If one sets A = L & E equal to zero by subtracting A from both sides....( 0 = -A + L + E ) Then the debit account has negative signs in front of them, and is the one debits increase.- We can adapt this to the expanded equation (A = L + E + Revenues - Expenses - Draws), re-phrasing as:0 = - Assets - Expenses - Draws on equity + Liabilities + Equity + Revenues, On the left, Debit side are the debit accounts, increased by debiting, while on the right, Credit side are the credit accounts, increased by crediting!- (Note: BeanCounter Dave Marshall's equation 'Property = Property rights' summation of 'Assets = Liabilities + Equities' really opened doors for me - thanks to him; I use it here.)- We can rewrite Marshall's simplified equation, then under it, the expanded equation, like this:
0 = - Property + Property Rights____________|_______________________________ - Draws + Principal/Equity/Ownership | Owner's Line0 = - Assets + Liabilities | Business Line - Expenses + Revenues/Income | Changes Line ____________|_____________0 = - Debits + Credits---------------------|--------------------- _So the debit accounts all are types of property, while the credit accounts are all types of property rights,and the debit accounts, on the left, are increased by debits, (Draws, Assets and Expenses) while the credit accounts, on the right, are increased by crediting. (Principal, Liabilities, Income)- Do you think that helps? Brian _______________________________________________ gnucash-user mailing list gnucash-user@gnucash.org To update your subscription preferences or to unsubscribe: https://lists.gnucash.org/mailman/listinfo/gnucash-user If you are using Nabble or Gmane, please see https://wiki.gnucash.org/wiki/Mailing_Lists for more information. ----- Please remember to CC this list on all your replies. You can do this by using Reply-To-List or Reply-All.
