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

[Gregg Fowler]

On Wed, 2006-01-25 at 12:19 -0500, Derrick Hudson wrote:

> 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
> 
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I get the gist of why it is the way it is, but I will have to think
about my transactions while imputing
 them for a while until it becomes "natural". Eventually, it will be a
natural way for me to do things.

Thanks,
Gregg
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