Philosophical Question (GnuCash)

Two of the biggest mental obstacles to understanding double entry
accounting are the words
credit
debit

Many of us in my accounting 101 class had a hard time coming to grips
with that. Credits don't mean you put money in, debits don't mean you
took money out.
A lot of the students had a hard time understanding that a debit of a
cash account could mean putting money into a cash account.

Jim's explanation is good, but it glosses over the use of the words
credit and debit, which trips up many of us who are accounting and the
use of double entry accounting.

On Sat, 2003-02-01 at 15:33, Jim wrote:
> The simple explanation to double entry accounting is that for every
> debit you enter, you must enter a corresponding credit. If you debit an
> asset account for $100.00, you must make one or more credit entries
> matching the $100.00 debit.
>
> e.g. - you transfer $100.00 into cash. That cash has to have come from
> somewhere. It could be a transfer from another asset account, which
> would necessitate a credit to that other asset account, or it could be
> offset by a credit to a liability account, such asaccounts payable or
> owner equity.
>
> The reasoning for this is simple - assets must always equal liabilities
> plus equity.
>
> On Sat, 2003-02-01 at 12:44, David Mandala wrote:
> > You might want to get a book on double entry bookkeeping. Any accountant
> > knows how to set it up and make entries. It is not intuitive without so
> > type of training. That said double entry bookkeeping is how most
> > businesses track their finances. Single entry is frowned up in
> > accounting circles.
> >
> > Cheers,
> >
> > Davidm
> >