Chris, As someone suggested earlier , you question indicates that you need to better understand double entry bookkeeping (https://gnucash-docs-rst.readthedocs.io/en/latest/guide/C/ch_basics.html#accounting-concepts That explanation is still fairly cursory. A search online for "double entry accounting" and "debits and credits" will usuually produce a lot of material to explain in more detail. Thinking in terms of payments makes it more difficult.
The function of a debit or credit in an entry depends on the basic account type and the accounting equation expressed in the in the form Assets+ Expenses=Liabilities + Equity +Income Accounts of the type on the left hand side will have the balance of the account increased by a debit entry and decreased by a credit entry with the reverse for accounts of the type on the right hand side. For example in accounting practice the balance of an account is always expressed as a positive number and the account is said to be either in credit or debit. For an Asset account (LHS) a debit balance is a positive balance and a credit balance is negative (and usually put in red ink) The same for expense accounts. These are debit balance accounts. A Liability account (and similarly Equity and Income accounts) is a credit balance account and a credit to the account increases its balance and a debit decreases the balance. So if a Liability, Equity or Income account has a credit balance in accounting it has a positive balance in arithmetical terms. Any transaction has at least two entries, a debit to one account (e.g. of type Asset and a credit to another acoount (e.g. of type Expense) for the same amount. It can have more than two entries to any relevant accounts but the sum of the debits is equal to the sum of the credits for the transaction. David Cousens On Mon, 2023-07-24 at 16:53 +0100, Chris Green wrote: > Is there a 'right' way to handle an account which gets payments in two > directions? > > E.g. I have good relations with a friend and we often buy things for > each other and settle up at the end of the month. Sometimes I owe the > friend some money, other times the friend owes me some money but it's > very definitely one account and one wants to see all the payments in > one place. > > I guess one can just say it's an 'Expense' account and make payments > in either direction as required, is this the only way or is there a > special name for such an account? > _______________________________________________ gnucash-user mailing list [email protected] To update your subscription preferences or to unsubscribe: https://lists.gnucash.org/mailman/listinfo/gnucash-user ----- Please remember to CC this list on all your replies. You can do this by using Reply-To-List or Reply-All.
