Accounting 101 Debit -vs- Credit
Thu, 18 Jul 2002 12:16:57 -0600
Eric E Moore <email@example.com> writes:
> Matt Armstrong <firstname.lastname@example.org> writes:
>> I've turned "Use accounting labels" on because I was getting
>> confused when the informal synonyms used in GnuCash kept changing
>> depending on the account I was in.
>> Anyway, the terms seem to be used the exact opposite of what I
>> would expect.
>> Account:Liquid:Savings debit $0.14
>> Income:Interest credit $0.14
>> I would expect interest income to credit my Savings account, since
>> the balance increases. I suppose this comes from my ATM Debit
>> card, where I use it to withdraw money. So I think of debit as
>> Can someone with accounting knowledge explain to me the accounting
>> definitions of debit/credit? The dictionary was no help.
> The basic rule is debits increase assets, and decrease liabilities,
> and credits increase liabilities and decrease assets.
I still find it a bit non-intuitive (after reading everybody's
comments). My conclusion is that I'll just have to re-learn the
meaning for "credit" and "debit." I don't think anybody gave clear
definitions of what the terms mean, so I went out on the web and found
- money always flows from debit to credit
- money always flows right to left (since the credit column is on
- money coming from == a credit
- money going to == a debit