Why it is the opposite when it comes to accounting where the debit balance in on the left side and the credit balance is on the right side?
Why is this difference between accounting as it is usuall and Balance of Payment accounting?
Why are credit and debit balances cross-changed?
2006-07-26 00:53:25 · 2 answers · asked by Anonymous in Business & Finance ➔ Other - Business & Finance
Balance of Payment accounting is accounting the way the financial insitiution has to record the items on thier books. So for your account it would be opposite but for them it is correctly placed
Example for a bank, your deposit on thier books would be recorded :
Dr Cash
Cr Demand Deposits. (A liability account)
On your Account they have given you CREDIT for your deposit. So they have added money to thier payable for demand deposits.
Example 2: The bank Charges a customer with $35.00 as a service charge for the monthly service charge. To record the transaction on the banks books:
Dr Demand Deposits.
Cr Service Charge Revenue
So the bank has subtracted money from your account reducing thier liability.
2006-07-26 01:03:01 · answer #1 · answered by mikeae 6 · 2⤊ 0⤋
BOP is wrong, Accounting you receive with your left (debit) and hand out (give) with your right (credit) - Maybe BOP is looking at what happened so it is a mirror image
2006-07-26 01:40:55 · answer #2 · answered by godfreyfranz 1 · 0⤊ 0⤋