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

[Derek Brader]

Hi,

A further clarification... I think Merriam Webster puts it pretty well:

Main Entry: debit
Function: noun
Inflected Form(s): -s
Usage: often attributive
Etymology: Latin debitum debt -- more at DEBT
1 a : an entry on the left-hand side of an account constituting an
addition to an expense or asset account or a deduction from a revenue,
net worth, or liability account b : any one of the items on the
left-hand side of an account; also : the sum of these items -- opposed
to credit; abbr. dr c : a charge against a bank deposit account

Citation:  "debit." Webster's Third New International Dictionary,
Unabridged. Merriam-Webster, 2002. http://unabridged.merriam-webster.com
(25 Jan. 2006)

Note that, in definition 1c, a "bank deposit account" would be a
liability type account (from the bank's perspective).

~derek


on 1/25/06 12:19 PM, Derrick Hudson wrote the following:
> 
> 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
> 
> 
> 
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