That's a very good explanation Stan, thank you. Richard
<goog_968996680> https://oscar-idp.com On Tue, 25 Jun 2024 at 20:29, Stan Brown (using GC 4.14) < stan+gc_at_fastmail.fm_rca...@duck.com> wrote: > DuckDuckGo was unable to verify sender identity > > On 2024-06-25 12:10, rudy beuc wrote: > > So, I get my files all set up with my desired account structure. Here's > > the thing, in my checking account, my opening balance appears as a debt. > > In fact what should be the Credit and Debit Column as I've seen in other > > examples, appears to be reversely labeled. The Debit column is directly > > next to the cleared or not cleared column. If I enter a check into the > > checking account, it wants to appear as a credit. > > > > What's going on, how do I fix this? > > Nothing is "going on", and there's nothing to fix. Your checking account > is an asset to you, which means that its balance is normally a debit > (not "debt"). In transactions, a debit (such as a deposit) increases > your checking balance and a credit (such as writing a check) decreases > your checking balance. > > Assets and expenses: debit increases balance, credit reduces balance > Liabilities, equity, and income: debit reduces balance, credit increases > balance > > Your confusion may come from this: that very same checking account is a > liability to your bank. A credit increases the balance > _on_your_bank's_books_ and a debit decreases the balance. > > Because of this, ordinary consumers are used to thinking that a credit > increases their checking account balance. And that's true -- on the > bank's books -- but it's exactly backwards on your own books. > > Similar confusion reigns regarding credit cards. Your credit card > balance is a liability to you: buying something increases your balance > and is therefore a credit on your books; making a payment decreases your > balance and is therefore a debit on your books. (More completely: making > a payment, like every other transaction, has a debit side and a credit > side. The debit side is the reduction in your credit-card balance; the > credit side is the reduction in your checking account.) > > Again, ordinary consumers are confused because banks describe things > from the banks' perspective. To them, your credit card account is an > asset: a debit increases the balance of that asset and a credit > decreases the balance. When you make a payment or return a purchase "for > credit", it is indeed a credit to that account on the bank's books, but > it is a debit to that account on your books. > > Stan Brown > Tehachapi, CA, USA > https://BrownMath.com > _______________________________________________ > gnucash-user mailing list > gnucash-user@gnucash.org > To update your subscription preferences or to unsubscribe: > https://lists.gnucash.org/mailman/listinfo/gnucash-user > ----- > Please remember to CC this list on all your replies. > You can do this by using Reply-To-List or Reply-All. > _______________________________________________ gnucash-user mailing list gnucash-user@gnucash.org To update your subscription preferences or to unsubscribe: https://lists.gnucash.org/mailman/listinfo/gnucash-user ----- Please remember to CC this list on all your replies. You can do this by using Reply-To-List or Reply-All.
