Almost, but not.
Where the money ends is positive, yes.
But not Credit. Credit is negative.
Your example is strange.
Money goes from something you owe (Liabilities) to something you have
(Assets). (Like saying: I thought I owed something to somebody, but
that's not correct. I do not owe this anymore.)
This would only make sense if it was some kind of correction, I suppose.
Normally it would be the other way around.
Money goes from Assets to Liabilities to pay your loans, bills, visa
card, and anything else you might owe.
Accountants say some account is debit or credit just to remember what
it's main purpose is. But other from that, all accounts are the same.
Even though money can flow in any direction, normally it flows for
example from Liabilities or Assets to Expenses (Expenses is an amount
that will always get bigger (more positive).)
And from Income to Assets. (Assets is positive (debit), Income is
negative (credit).
Finally money also typically flows from Assets to Liabilities, to pay
what you owe.
This is just the general or typical way money flows.
Regards, Stefan
El 08/05/15 a las 09:42, Kev Lau escribió:
hi kinleyd,
glad this is all helping you too. Once I make sense of all this I will
write a page for newbies(like us) who want/need to use ledger. It will
be a crash course of basic accounting and how it applies to ledger. I
till havent wrapped my head around all the concepts well but this is 1
thing I might have under stood
Line 1 : Where money ended up (recorded in a positive) = Credit
Line 2 : Where money came from (recorded in a negetive) = Debit
Assets:Cash:Citibank $12,998.06
Liabilities:Account_Payable:Venture_Ent $-12,998.06 ; OR can be
left blank as ledger will balance itself.
Please tell me if I am headed in right direction.
On Thursday, May 7, 2015 at 4:52:16 PM UTC+7, Kev Lau wrote:
Hi,
I am still having difficulties with coming up with a proper mean
of using a ledger for my business. I am hoping that someone here
could see my Ledger and tell me if it looks sound. I don't want to
make alot of entries and later realize I have been doing it wrong.
I have read some material on accounting and feel that I understand
how to make entries(but not sure how well I am organized and
structured)
Below is a sample of my hypothetical testing ledger. If you could
have a look and give me some advise/tips I would deeply appreciate it.
#GENERAL_ELECTRIC:ASSETS:CASH:CITIBANK US$-12,998.06 ;cash
recd, debit to cash acct.
#GENERAL_ELECTRIC:LIABILITIES:ACCOUNT_PAYABLE:VENTURE_ENTERPRISE
US$ 12,998.06
#GENERAL_ELECTRIC:EXPENSES:BANK:CITBANK:FEES US$-19.35 ;cash
paid out credit to cash acct.
#GENERAL_ELECTRIC:EXPENSES:BANK:CITIBANK:FEES US$-77.41 ;cash
paid out credit to cash acct.
#GENERAL_ELECTRIC:ASSETS:BANK:CASH
#GENERAL_ELECTRIC:ASSETS:CASH:CITIBANK US$-4,998.06
#GENERAL_ELECTRIC:LIABILITIES:ACCOUNT_PAYABLE:VENTURE-ENTERPRISE
US$ 4,998.06
#GENERAL_ELECTRIC:EXPENSES:BANK:CITIBANK:FEES US$-34.19
#GENERAL_ELECTRIC:EXPENSES:COST_OF_GOODS_SOLD:TRIA_SOLAR:INV004
US$-12,000.00
#GENERAL_ELECTRIC:EXPENSES:BANK:CITIBANK:FEES US$-34.19
#GENERAL_ELECTRIC:EXPENSES:COST_OF_GOODS_SOLD:DYNO_WORKS:INV004
US$-3,808.00
#GENERAL_ELECTRIC:ASSETS:CASH:CITIBANK
#GENERAL_ELECTRIC:REVENUE:SALES:MICROSOFT:INV004 US$6,000.00
#GENERAL_ELECTRIC:ASSETS:RECEIVABLES:INV004
US$-6,000.00
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