When viewing bank account page Manager shows credit transactions in Debit column and debit transactions in Credit colum, see attachment. Even though the bank account is in credit, balance column displays “Dr”
I don’t think that that’s a problem, when you make a deposit of your own funds, you convert one asset of yours (cash) to another asset (bank deposit). And your asset (Debit) is naturally a liability (Credit) to the bank.
In the banks books, your bank account should reflect deposits are credits and your drawings are debits.
However, in your books, your bank account should reflect deposits as debits and drawings as credits.
If that’s the case you describe, then don’t worry about it, that’s just how things work.
If not, you need to submit more evidence of this discrepancy.
First things first. Nowhere in my post I have mentioned my own founds.
The transaction I’m talking about (see screenshot) is a simple receipt for the sum of money received that I believe should credit bank account not debit it. The three other transactions from the screenshoot above are inter account transfers from business account in question to another bank account which in turn should debit the account not credit it.
Now, as far as the bank goes whatever is deposited in or credited to your bank account is your funds.
That out of the way, if you have read my first post carefully you would come to realize the two rules, which are:
All Credits on your bank statements are Debits on your books regardless of who’s funds is it. Receipts, Deposits, Transfer … It doesn’t matter as long as it’s a credit on your bank statement
All Debits on your bank statements are Credits on your books regardless of who’s funds is it.
The system works fine, you just need to get more familiar with accounting.
That must be one of the Romans who has invented double-entry bookeeping centuries ago.
Any ways, thank all of you for explaining. Even though it is counter intuitive to me this is how it works and I accept it. Sorry for beeing a bit harsh in my reply.
It wasn’t the Romans, anyway. Double-entry accounting was invented in Firenze (Florence). The Guide @Joe91 linked actually explains why most people get debits and credits backwards.
Let me explain it this way.
When you have your own money, it is an asset, hence a debit to the bank account.
When you deposit your own money with a bank, it is still your money, but the bank has a liability, as they owe the money back to you, so in their books it is a credit.
In another words, when making a deposit you are actually loaning your money to them.