Reconciling - deposits and withdrawals reversed?
jgold723
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?
0
jgold723
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?
Comments
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.
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.
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.