> Randolph Fritz <[EMAIL PROTECTED]> writes:
> > Could someone tell me, please, the historical background of this odd
> > use of language? If it's already been discussed, then please point me
> > to the archives.
>
> When you make a deposit in a bank account, the bank OWES YOU money.
> You become a "creditor" and the bank is a "debtor", just as if you had
> loaned the bank money. Which you have.
>
> A "credit" is a "payment by a debtor on an amount due" by both common
> sense and accounting practice.
>
> Therefore, a withdrawal of money from the bank, which reduces the
> balance of the account and therefore the amount that the bank owes
> you, is a "credit".
>
> A "debit" is etymologically a "debt", i.e. an increase in the amount
> owed by a debtor, again in both common sense and accounting practice.
>
> Therefore, a deposit of money into the bank, which is an increase in
> the balance of the account and of the amount of money that the bank
> owes you, is a "debit".
>
> I had to have this explained to me a million times but now it makes
> perfect sense and I can't even think of a withdrawal being a "debit"
> any more (how's that? I don't owe the bank any money!)
Let's see if I understand this now.
Does this mean that if I overdraw my chequing account, and subsequently
deposit $16.74 to cancel the overdraft, that the $16.74 is a credit,
because I owed the bank money? And if I subsequently deposit $15.75 to
make the balance positive, the $15.75 is a debit, because it establishes the
bank's debt to me?
-- hendrik.
>
> Bill Gribble
>
>
>
