4 ms·

> That's a drastic oversimplification. Typically, both debits and credits are entered into an accounting program as positive numbers, and it is the nature of th

by Naga 5y ago

> That's a drastic oversimplification. Typically, both debits and credits are entered into an accounting program as positive numbers, and it is the nature of the account being debited or credited that determines whether the number is added to or subtracted from the account balance. This is both technically correct and incorrect. You're right about the nature of debits and credits, but practically every accounting software I've ever used (I'm a CPA) represents credits as negative numbers. The software just assumes that the user knows that it's actually a credit, not a negative number.

PopAlongKid 5y ago
"A credit is an accounting entry that either increases a liability or equity account, or decreases an asset or expense account. It is positioned to the right in an accounting entry."[1] So if you always represent your credits as negative numbers, then you have to (counter-intuitively) subtract it from Liab/Eq/Inc accounts that you are increasing, or add it to Asset/Exp accounts that you are decreasing. I wrote my own double entry accounting program back in the 1980s using a DOS relational database program and used it successfully for the next twenty years (before I switched to using Quickbooks) for both personal and business purposes. Both programs (mine and QB) represent credits as positive numbers. [1]https://www.accountingtools.com/articles/2017/5/17/debits-and-credits https://www.accountingtools.com/articles/2017/5/17/debits-an...
- darcys22 5y ago
  This highlights the stumbling block that programmers have when trying to understand debits and credits. You should not at all be trying to classify your accounts as Liab/Eq/Inc, its simply an account with a debit or credit balance. Its why i dislike the accounting equation. Its leads people to really overvalue how important account types are. On the database level you dont care at all about it. The accounts are simply another text column and the bare minimum has no further information. Only when trying to present the accounts in a P&L or something do you try to ascertain what the type is. Even then the only essential information is whether the account is debit or credit positive, and maybe whether it is a P&L or balance sheet account. Its at this point here that you could optionally classify the account as Liab/Eq/Inc to give you some nice headers for the financial reports but to be honest you could just throw that back on the user and let them classify their own headers. Accountants are normally better at knowing what their financials should look like and forcing them to comply with your account types is probably a limiting and frustrating anti feature.

by Naga 5y ago

PopAlongKid 5y ago

"A credit is an accounting entry that either increases a liability or equity account, or decreases an asset or expense account. It is positioned to the right in an accounting entry."[1] So if you always represent your credits as negative numbers, then you have to (counter-intuitively) subtract it from Liab/Eq/Inc accounts that you are increasing, or add it to Asset/Exp accounts that you are decreasing. I wrote my own double entry accounting program back in the 1980s using a DOS relational database program and used it successfully for the next twenty years (before I switched to using Quickbooks) for both personal and business purposes. Both programs (mine and QB) represent credits as positive numbers. [1]https://www.accountingtools.com/articles/2017/5/17/debits-and-credits https://www.accountingtools.com/articles/2017/5/17/debits-an...

darcys22 5y ago
This highlights the stumbling block that programmers have when trying to understand debits and credits. You should not at all be trying to classify your accounts as Liab/Eq/Inc, its simply an account with a debit or credit balance. Its why i dislike the accounting equation. Its leads people to really overvalue how important account types are. On the database level you dont care at all about it. The accounts are simply another text column and the bare minimum has no further information. Only when trying to present the accounts in a P&L or something do you try to ascertain what the type is. Even then the only essential information is whether the account is debit or credit positive, and maybe whether it is a P&L or balance sheet account. Its at this point here that you could optionally classify the account as Liab/Eq/Inc to give you some nice headers for the financial reports but to be honest you could just throw that back on the user and let them classify their own headers. Accountants are normally better at knowing what their financials should look like and forcing them to comply with your account types is probably a limiting and frustrating anti feature.