When looking at the json data from /inter-account-transfer-form.json i notice that what in the UI appears as the “Paid from” account is Credit and what in is labelled “Received in” account is Debit.
I’m confused. Can someone explain the reason why they’re like that?
The aliases you see as “Paid from” and “Received in” are just that: aliases. They’re simplified so not to confuse the end user.
However, in the backend they use the proper accounting terminology to correspond more closely to the General Ledger Transactions.
Basically when talking about own bank accounts: DEBIT is deposits and CREDIT is payment/drawing.
OK, thanks. Got it. Debit and Credit are reversed because they are taking the point of view of a Bank and not the user.
Sort of (but not really); debit and credit are actually not reversed in Manager. For a user, cash normally has a debit balance so a debit will increase it (the account receiving goes up) and a credit will decrease it (the account paying goes down).
Banks use these terms “backwards,” showing increases to your account as credits and decreases as debits because from their perspective the money they hold for you is a liability, which normally has a credit balance; for the bank a debit decreases their liability and a credit increases it.
Read the Guide about how to design a chart of accounts. It includes a discussion of debits and credits.