Debit and credit mix up

1

Hello,

I am sure I am not the only one struggling with this but I always mix up the “credit and debits” for certain accounts.

Right now I have a director load of 5000(the business owes my wife 5000 euro), I create the shareholder loan liability account but I am unsure if the starting balance should be a debit or a credit.

At the moment I have set it as a credit of 5000 Euro, am I correct with this?

In my head it would have been the opposite way around(debit = debt = owing) but it looks like in accounting, a debt can be a credit if the account is a liability(hope I am correct with this…).

Thank you.

2

You are correct, it should be in the Current Liabilities Section, and should be a Credit

3

Thank you so much!

4

Owing to you.
When a supplier gives you a credit account, its owing to them

5

Thanks

6

You might find this Guide useful: Design a chart of accounts | Manager.

In fact, most of the questions you have asked since you joined the forum would have been answered by reading the Guides first. That should always be your first source of information. Their topics are selected based on the most frequent questions.

You might also spend some time on one or more of the excellent, free web sites on accounting principles. It is much easier to use a tool like Manager if you know what it’s trying to accomplish.