invoice date vs bank transaction date

[Buddha Buck]

On Tue, Dec 24, 2013 at 11:01 AM, Parker Jones <zoubidoo at hotmail.com> wrote:

> The end-of-year totals remain unchanged, sure, but the running balances
> won't necessarily match bank statements during the year and I'd rather
> avoid that source of confusion.  The books really should match the bank
> statements.


Why? The bank statement reflects the banks books, not yours. This is
evident in (among other things) the fact that most bank statements that
list deposits and withdrawals in separate columns put deposits in the right
column and withdrawals in the left column, reflecting that to the bank,
your deposit is a credit into a liability account and your withdrawal is a
debit from a liability account, just the opposite thinking to your own
books.

To  give an practical example, if you were to go to a concert this week and
buy $100 worth of merchandise by check from the musicians, but they were
unable to deposit the check until they got home from touring 3 months
later, would you want your books to say you spent the $100 in December
(when you wrote the check), or in March (when it cleared the bank)?  Which
would be more useful for you when deciding if you could afford something in
February?