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 _______________________________________________ gnucash-user mailing list gnucash-user@gnucash.org https://lists.gnucash.org/mailman/listinfo/gnucash-user ----- Please remember to CC this list on all your replies. You can do this by using Reply-To-List or Reply-All.
