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All accounts "fall neatly" into the broad categories, though. There are sub-categories for accounts with contrary normal balances for a given type of a given ac
by EvanAnderson 5y ago
All accounts "fall neatly" into the broad categories, though. There are sub-categories for accounts with contrary normal balances for a given type of a given account category but they still summarize into their parent category.
A contra-equity account (like "Owner draws") has a normal debit balance. That's contrary to the normal credit balance of an equity account. It still summarizes to equity and results in the owner's draws being debited from the owner's equity debit balance.
When I hear programmers talking about debits / credits like they're positive or negative I get a feeling that they're trying to re-invent a really simple "wheel" that they don't want to understand. It reminds me of wild gyrations programmers go thru w/ ORM's to avoid just learning some SQL.
- darcys22 5y agoThey dont fall neatly at all. Yes all the accounts you have described can be categorised fairly easily but they are all pretty trivial examples. Harder accounts are things like tracking inventory. Yes you have the easy "Inventory" account on the balance sheet, but what about the "Opening Balance", "Purchases" and "Closing Balance" accounts that live on the profit and loss. They are all debit positive accounts but two of those always carry a credit balance and should be presented as a negative on the P&L. If you want to be pedantic then probably those 3 accounts combined make up an expense account. But accountants split them out to make the financials easier to process. And the account split into 3 sub accounts for better presentation doesnt fit into the broad categories, but its still normal practice.