Transfer query.

[Mike or Penny Novack]

On 6/13/2017 2:00 PM, Eric Coates wrote:
>
>

>
> "Credit" and "Debit" are technical terms that accountants use in a way 
> somewhat different from "real" people. As a way of understanding this 
> it may help to think that "ordinary" people tend to think in terms of 
> how a transaction affects them, accountants think in terms of how it 
> affects the counter party (when you deposit money in a bank you see it 
> as crediting you, an accountant sees it as creating a debt the bank 
> owes you). If anyone knows of an easier/more correct way to explain it 
> I, for one, would like to hear it

I will try. Double entry bookkeeping goes back to the days when educated 
people (people who could read/write) used Latin for semi secret.

You deposit money in the bank. That means the bank OWES you that money 
(you can demand it back)     debit = he owes

You owe somebody else (that liability account). He trusts that you will 
pay when demanded     credit = he trusts

THAT was the big advance in trade/banking. That they didn't have to 
physically transfer all the money involved, could just exchange debits 
and credits and then the only physical money that had to be transferred 
was to adjust balances.  It didn't do thieves/pirates any good to steal 
documents being shipped indicating who owed whom or had  a credit with 
whom.

Michael D Novack