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Reconciling - deposits and withdrawals reversed?

jgold723jgold723 Member Posts: 15

When I try to reconcile, I see deposits listed as Debits and Withdrawals listed as credits. This seems backward to me. Can someone advise?

edited March 30, 2021 in Accounting Technical Support

Comments

  • KimptonKimpton Member Posts: 78 ✭✭

    someone should give you an answer:
    Accounting is actually 'double-entry' that records everything as both a positive number (debit) and a negative number (credit) so that every transaction zero's out.
    Why? - Well, there is a lifetimes study of history to answer that question.
    Here's a handy cheat sheet:
    Debit Credit
    Asset Increase Decrease
    Liability Decrease Increase
    Income (revenue) Decrease Increase
    Expense Increase Decrease
    Capital Decrease Increase

    If you're going to be doing your own bookkeeping or you want to understand your financials, you would do well to take a basic bookkeeping course.

  • jgold723jgold723 Member Posts: 15

    Thanks, I appreciate that, especially the cheat sheet! Just to make sure I'm following your logic, you're associating different events with either a Debit or Credit? So an Income decrease = debit and an Income increase = credit.

    Makes sense, except for the Asset Increase = Debit and Asset Decrease = credit.

    But maybe I need to Google that. Anyway, thank you.

  • KimptonKimpton Member Posts: 78 ✭✭

    Yes, take some time to understand the 5 different account types and what their 'normal' balances signs are. It will pay off handsomely as you build your business.

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