• mph
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  • Registered: 10/21/2010
  • Posts: 16

Topic: Bank accounts show all transactions as debits.

Okay, I'm new to accounting.   But I don't think I'm this dumb... Well, I guess that's to be proven. LOL

All my bank accounts show only debits.  Customers make payments that show up as debits in the bank account, I pay myself occasionally, they also show up as debits in the bank account.  According to the software, I'm WAY beyond broke. wink

  I've set up 3 or 4 separate databases to see what I'm doing wrong.  I generate invoices under the sales tab.  I make customer payments under the same tab.  It shows FROM customer TO bank account, yet when I make the payment, it shows up as a debit.

  What am I doing wrong???

I'd rather have a bottle in front of me than a frontal lobotomy.
  • p2409
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  • From: Australia
  • Registered: 12/11/2008
  • Posts: 127

Re: Bank accounts show all transactions as debits.

You need to acquaint yourself with the concept of double entry accounting, and drop the idea that a credit means an increase: an increase in bank account is always a Debit as it's on the Asset side of the equation. Lots of weblinks out there will help.

  • mph
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  • Registered: 10/21/2010
  • Posts: 16

Re: Bank accounts show all transactions as debits.

Double entry accounting is really nothing more than "if it's going somewhere, it must come from somewhere" and vice versa.  I've been using it for since 2003  with GNUCash.

All accounting jargon aside...  If I sell $100 worth of product, put it in the bank, then pay myself that same $100.  My bank account balance should zero, not the $200 my balance is showing.  All of the customer balances are working out exactly as expected.  Additions, subtractions for inventory vs. services all look good.  The bank account balance looks fine, that is until I pay myself.

The way I figure it, I'm either missing a transaction, or just plain doing something wrong.  What I need is a process flow.  Every accounting package is a little different.  Someone with experience would be able to pick up on the nuances without much trouble.  Me on the other hand, no so.  I tried looking through the documentation, all I could find was the database relations. 

I'll figure it out.

Thanks,

MPH

I'd rather have a bottle in front of me than a frontal lobotomy.