[GNC] Recommended Method of Entry for IRA Distributions

[Stan Brown]

On 2023-01-12 09:41, R Losey wrote:
> Thanks; I know the information is out there, but intuitively, it doesn't
> make sense to me that depositing funds to my bank account is a "debit"
> transaction to the bank. It comes from the concept of credit being "added
> to" and debit being "substracted from", I suppose.

That principle is correct as far as it goes, but you are trying to
stretch it too far.

For liabilities, equity, and income, credits do indeed increase the
balance and and debits decrease it.

But it is exactly the opposite for assets and expenses: credits _reduce_
them and debits increase them.

Here's how to remember it: if somebody gives you $50, you have income,
which we all agree is a credit to your income account. But you have also
increased your cash account by $50. But ... debits and credits in a
transaction must balance, so that increase to cash must be a debit to
balance the credit to your income account.

> Is the "Debit on the left" and "Credit on the right" true in general
> accounting, or just GnuCash?

That's general. When Ernst & Ernst (as it then was) gave me a crash
course in accounting, the instructor said that "debit" and "credit" are
best thought of as meaning, respectively, simply "left" and "right".

Stan Brown
Tehachapi, CA, USA
https://BrownMath.com