"Proper" ledgers for accounting

Jay's Avatar


28 Nov, 2023 09:39 PM

I realize that check register types of software such as MoneyDance (as Quicken did) try to emulate the old manual checking account ledger which records transactions from the bank's point of view (Deposits as credits and Checks as debits) rather than vice versa. However, for those who desire proper accounting ledgers (Deposits as debits and Checks as credits) from the user's standpoint, it seems like it would not be too difficult to include a preferences toggle that would let a user de-select the standard setting, and which would thereby flip the screen columns for debits and credits [edit: so that debits column would be on the left; and credits column on the right]. Please consider such an option toggle in a future update.

  1. 1 Posted by dwg on 28 Nov, 2023 10:41 PM

    dwg's Avatar

    I disagree with your statement.

    A deposit is a credit, and a cheque is a debit from the users point of view as a deposit increases my balance and a cheque decreases it. From the Banks point of view a deposit is a debit entry as it increases what they owe you.

  2. 2 Posted by Jay on 29 Nov, 2023 02:43 AM

    Jay's Avatar

    Look in any accounting textbook that has ever been written. A debit entry in an account represents a transfer of value into that account, and a credit entry represents a transfer of value out of the account.

    It's been that way in all the world ever since Fra Luca Pacioli wrote the definitive treatise on it in the 1490s.

    True on either side of the pond.

    Because bankers talk to people from their point of view, people have begun to think from the bankers perspective. But if you have an asset (your money in the bank), the banker has a liability (money owed to you). When you put money in the bank, the bank CREDITs your account because they owe you money, and the deposit is an increase in their debt which is a CREDIT. But that is in the BANK's records. In YOUR records, the deposit is a DEBIT, an increase to an asset.

    The common misconception (thinking from the banker's side of the transaction) is why inexpensive check register types of software (e.g. MoneyDance, Quicken) follow the format that they do. Nevertheless, for individuals who know anything about accounting (literally, the first day of class), it would be helpful to have a toggle to switch the presentation for proper accounting. Those uninitiated in the dark arts of accounting need never see it. But some of us would appreciate it.

  3. 3 Posted by dtd on 29 Nov, 2023 02:58 AM

    dtd's Avatar

    First, I appreciate your need to see "proper accounting". I have accounting experience from college and worked for a tax company.

    Still, I also disagree. Though on day 1, indeed, one is taught about debits and credits from a bankers point of view, shall I ask, are you a banker?

    With Moneydance, or omg Quicken, or most PERSONAL financial software, the concept is reversed. And, I won't argue with your assertions as to what is a debit or credit on each side, though I'd claim some of your assertions are incorrect.

    It's really about POV. For a user, a client, I'd hope you'd agree that their viewpoint is the opposite of the banks. You don't apply debit/credit concepts equally to opposite viewpoints.

    The common misconception (thinking from BOTH sides of the transaction) is why there can't be disparate formats in where the words "debit" and "credit" reside.

    So, given this is indeed computer software from the user's POV, why do you feel you need to request/insist that it display items from a banker's format (POV). Is this YOUR data as a user, or do you just feel due to your background and teaching, you want to see YOUR data from a banker's POV?

  4. System closed this discussion on 28 Feb, 2024 03:00 AM.

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