Hendrik Boom writes:
> 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?
No. Each check you write is a credit to your checking account (in your
books, not the banks) because it reduces the amount the bank owes you.
This includes the check that caused the overdraft. During the period that
the overdraft existed your checking account had credit balance because you
owed the bank money. The $16.74 is a debit because it decreases the amount
you owe them.
> 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?
It is a debit because it increases the bank's debt to you. The concept has
been abstracted a bit: anything that moves the balance of an account in the
debit direction is a debit, even if the balance remains a credit balance
after the transaction.
--
John Hasler
[EMAIL PROTECTED] (John Hasler)
Dancing Horse Hill
Elmwood, WI
