On 9/15/2019 10:01 PM, Peter West wrote:
. That means that increases in an Asset are debits, while decreases are
credits; and increases in Liabilities (or Equity) are credits, while decreases
are debits.
Income increases assets; an increase in an asset is a debit; therefore the
balancing entry for income must be a credit.
Expenses decrease assets; a decrease in an asset is a credit; therefore the
balancing entry for expenses must be a debit.
Not necessarily, and that needs to be stressed precisely because this
began with credit cards.
An income item will increase assets OR decrease liabilities << in either
case, a debit >>
An expense will decrease assets OR increase liabilities << in either
case, a credit >>
For example, if you paid an expense with a check, db expense; cr
checking but if you paid with the credit card would be db expense; cr
credit card.
Then when you pay against credit card charges might be:
1) balance paid in full, no interest ----- db credit card; cr checking
2) if interest part of that payment a split db credit card, db
credit card interest; cr checking
(you might instead choose to have entered the interest as a
credit card transaction first)
Michael D Novack
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