Fwd: Re: Paying Expenses

[Bill Gribble]

On Sat, Jul 21, 2001 at 12:45:36AM -0700, Leo L. Schwab wrote:
> On Tue, Jul 17, 2001 at 05:54:33PM -0500, Bill Gribble wrote:
> > btw: I'm using "debit" and "credit" in the accounting sense, which is
> > probably opposite of your usual usage of the terms.  To "credit" a
> > bank account means to take money OUT of it, and to "debit" a bank
> > account means to put money IN it.  
> >
> 	That's nuts.  What's the justification?

That's just the Way It Is.  If you ever take an accounting class they
will teach it that way, and if you use "debit" to mean withdrawal when
you are talking to your accountant you will confuse them.  debit means
money in, credit means money out.

Gnucash will show things this way if you select "always use accounting
labels" in the options.

The reason you know it the way you do is, as Robert Merkel said,
because the bank prints out paperwork that is from its point of view,
where your bank account is a liability instead of an asset (they owe
you the money).  For a liability, a debit decreases the balance and a
credit increases it... in the bank's case, if you take money out of
the account, decreasing the debt, the bank is essentially paying off
its debt (putting money in), so it's a debit.

b.g.