Hi, I created my balance with Manager, but i get an issue with General Ledger Transactions in the field Cash & cash equivalents the bookings are inverted what is actually Debit shows as Credit And what is actually Credit shows as Debit. All other transactions show correctly. As example the Bank fee should be Debit 10€ instead shows as Credit 10€ in the Cash & cash equivalents while it shows as Debit in the other areas.
What shows on your bank statement will always be the opposite of what it is recorded in your books.
The bank statement is from the bank’s perspective and your records are from your perspective so they should always be opposite.
Please follow both @AJD and @Joe91’s advice because understanding how debit & credit works for the Balance Sheet Accounts (Assets, LIabilities & Equity) and Profit & Loss Accounts (Revenue & Expenses) as per What Credit (CR) and Debit (DR) Mean on a Balance Sheet
A company’s chart of accounts contains different types of accounts. These include:
- Assets: The asset account contains a company’s resources, such as cash, accounts receivable, and inventory.
- Expenses: The expense account shows the company’s cost of doing business, such as expenses for materials, labor, and advertising.
- Liabilities: The liability account reflects what the company owes, such as accounts payable and wages.
- Equity: Equity refers to company ownership, such as in the form of stock and investment.
- Revenue: A revenue account contains the income generated by the business.
How Debits and Credits Affect Account Types
Every transaction that occurs in a business can be recorded as a credit in one account and debit in another. Whether a debit reflects an increase or a decrease, and whether a credit reflects a decrease or an increase, depends on the type of account.
Account Debit Credit Asset Increase Decrease Expenses Increase Decrease Liabilities Decrease Increase Equity Decrease Increase Revenue Decrease Increase
So a Cash & Cash equivalent account is a Asset account. The Bank fee “decreases” the value of your asset and following the table is recorded as a Credit. However that same bank fee also “increases” your Expenses account and from the table this means a Debit.
It is essential for any person dealing with accounting & finance to understand these basic principles.
It is also worth noting that financial statements frequently omit negative signs because the context is obvious. For example, credit balances in Manager are negative, but the balance sheet relies on the heading to let you know this, and presents credit balances (such as Liabilities) as positive numbers. This just reduces clutter.
The choice of whether debits or credits are positive or negative in a computerized system is arbitrary, but must be consistently applied throughout the application. Manager follows the convention of debits being positive and credits being negative.