Debit/Credit vs. Deposit/Withdraw in Edit->Preferences [was Applying Scheduled Payment Kills Program]

[Derrick Hudson]

On Tue, Jan 24, 2006 at 05:42:32AM -0600, Gregg Fowler wrote:
| On Mon, 2006-01-23 at 23:43 -0800, Beth Leonard wrote:
[...]
| > Debit/Credit is specific accounting terminology.
[...]
| To me they just sound opposite of what you are actually doing. I think I
| will change the setting.

I thought so too, until recently when I read (and understood) a good
description of the real meaning.  I think the description I found was
in some gnucash-related documentation, but I don't remember where.

At any rate, it basically goes like this:
    debit goes in to the account
    credit comes out of the account

So for a savings account, debit increases your balance (you have more
money) and credit decreases.  For a credit card, debits decrease the
balance (you owe less money) and credits increase it.

The trick is that when you receive a statement from a bank or credit
card company, you are seeing -their- view of the account.  Their view
is opposite of yours.  When a store gives you money back for returning
an item, the CC company records a "credit" on your account because
that money is no longer their's and is yours again.  Your record,
however, would show a debit because for you, have more money (by owing
less).  My intuition was wrong because I always saw the accounts (my
statements) from the other party's perspective and assumed credit
means more money (for me) and debit means less.

That being said, you can choose to view either set of headings.  I
found it worthwhile, though, to finally understand what the terms
really mean.

-D

-- 
Running Windows is kinda like playing blackjack:
User stays on success, reboots on failure
 
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