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You'd do the same in cash accounting. Otherwise you're recording wrong values, as compared to the actual account statements. Double entry means balancing active
by roel_v 11y ago
You'd do the same in cash accounting. Otherwise you're recording wrong values, as compared to the actual account statements. Double entry means balancing active and passive sides for all activities, asset and debt. When you buy a laptop with a credit card, you add (for example - the details depend on legal requirements, how much detail you want to capture etc) an entry with 1000 on the passive side, in the cc account, 500 on the active side (asset it's not worth what you paid for it any more) and 500 under depreciaton. Then when you pay the bill, you reduce the cc account and the checking account. Each of these operations individually are balanced, ie they sum to 0.
- merb 11y agothat's in fact the way I learned it and ynab doesn't look like it. however I didn't seen many people who use double accounting for their personal budget? maybe i didn't seen enough people yet, since it looks like that a lot of hn'er using double accounting...
- roel_v 11y agoDouble accounting for personal budgets is too much overhead, which is why ledger is a nice middle ground. I doubt many ppl reading this use double accounting for their personal finances - by the time you need that, you'll have someone else do it for you, and they won't be dicking around with ledger...